How to explain blockchain in plain English

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

up
409 readers like this
Reinvention Imperative

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.

Think about whether blockchain's unique characteristics provide business value.

“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.”

Read also: How to tell when moving to blockchain is a bad idea

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.

[ Want to give your team a sense of urgency? Get our new resource: Fast Start Guide: Creating a sense of urgency, with John Kotter. ]

Pages

One comment

"Blockchain is an

"Blockchain is an unchangeable, distributed way to store records of events."

No, no, no! A blockchain can be change if an entity controls 51% of the blockchain. They are only secure if there are a lot of miners competing to add the next block. Blockchains controlled by a single company can be changed just like any other database.

Pages

7 New CIO Rules of Road

CIOs: We welcome you to join the conversation

Related Topics

Submitted By Graham Binks
July 03, 2020

Be deliberate about the way you handle ideas, where you focus, and how you innovate with your customers for validation. Consider this six-step process to bring the best ideas to reality.

Submitted By Derek Smart
July 02, 2020

To get the best from DevOps, tackle your open source strategy in two dimensions: horizontal and then vertical. Consider this advice on tools and approaches that work 

Submitted By Michael Del Castillo
July 02, 2020

As a liaison between developers and executives, a solution delivery architect shows strong communication skills. You'll need to listen and translate what you hear into digestible solutions.

x

Email Capture

Keep up with the latest thoughts, strategies, and insights from CIOs & IT leaders.