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How to explain blockchain in plain English
Arm yourself with definitions that will help you explain blockchain to others. One expert compares it to a school lunch trade
Moreover, as you move to a point where you are actively considering a project or needing to make a convincing case for a blockchain investment to others in the company, brevity may lose some of its virtue.
Maryanne Morrow, a regular on the blockchain speaking circuit and CEO and founder of a fintech blockchain startup, 9thGear.io, notes that, say, a dictionary definition of blockchain – yes, it’s in the dictionary – might be a fine start, but it’s incomplete, especially in terms of explaining its business potential.
“Blockchain is a digital, always accurate, distributed ledger that allows for secure transactions without a central trusted third party,” Morrow says. Its characteristics, though, are the substance beneath the hype, and why she thinks blockchain will have a huge impact for decades to come. In Morrow’s terms, blockchain is:
- Immutable: Once agreed [upon], transactions cannot be changed.
- Encrypted: Increases security of transaction.
- Pseudonymous: Only the information necessary for a transaction is shared.
- Decentralized: Enhances security as information resides across every node in the blockchain.
- Consensus-based: Validation of a transaction requires acceptance by majority of the blockchain’s nodes.
- Time-stamped: Ensures that transactions cannot be double counted
- Resilient: Information resides in multiple nodes [which] ensures it is not lost in the event of a technical issue in one or several nodes.
The big-dollar question, then: Should more CIOs be kicking the tires on blockchain in their businesses? To begin to answer that question, you must think about blockchain in business – rather than technical – terms.
“In deciding whether to use blockchain, it is helpful to think about whether [its] unique characteristics provide business value,” says Red Hat’s Haff. “For example, if an industry has no system of trusted middlemen – or if existing middlemen are expensive or otherwise add friction – blockchain might be a good fit.”
Stay tuned: In an upcoming post, we’ll examine that question in more depth, including a closer look at some of the real and potential applications of blockchain in various organizations and industries.
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