While most people only started learning about “blockchain” because of Bitcoin, its roots and applications go much deeper than that.
Blockchain is a technology in itself. It powers Bitcoin, and is essentially the reason why so many new ICOs have flooded the market: creating an “ICO” is ridiculously easy (no barriers to entry).
The goal of the system is to create a decentralized database, which essentially means that instead of relying on “Google” or “Microsoft” to store data, a network of computers (usually run by individual people) can act in the same way. way than a larger company.
To understand the implications of this (and thus where the technology could take the industry), you need to look at how the system works at a fundamental level.
Created in 2008 (1 year before Bitcoin), it is an open source software solution. This means that its source code can be downloaded and edited by anyone. However, it should be noted that the central “repository” can only be modified by private individuals (so code “development” is basically not free for everyone).
The system works with what is known as a merkle tree, a type of data graph that was created to provide computer systems with access to versioned data.
Merkle trees have been used to great effect in various other systems; most notably “GIT” (source code management software). Without getting too technical, it basically stores a “version” of a dataset. This version is numbered and can therefore be loaded at any time a user wishes to revert to the previous version. In the case of software development, it means that a set of source code can be updated on multiple systems.
The way it works, which is to store a huge “file” with updates from a central data set, is basically what drives “Bitcoin” and all other “crypto” systems. The term “crypto” simply means “cryptographic”, which is the technical term for “encryption”.
Regardless of its core operation, the true benefit of broader “on-chain” adoption is almost certainly the “paradigm” it provides to the industry.
There has been an idea called “Industry 4.0” kicking around for several decades. Often conflated with the “Internet of Things,” the idea is that a new layer of “autonomous” machinery could be introduced to create even more effective manufacturing, distribution, and delivery techniques for businesses and consumers. While this has been mentioned often, it has never actually been adopted.
Many experts are now looking at technology as a way to facilitate this change. The reason is that what’s interesting about “crypto” is that, as Ethereum especially demonstrates, the various systems that are built on top of it can be programmed to work with a layer of logic.
This logic is really what IoT/Industry 4.0 has missed so far, and why many look to “blockchain” (or an equivalent) to provide a base-level standard for new ideas moving forward. This standard will give companies the ability to create “decentralized” applications that empower intelligent machinery to create more flexible and effective manufacturing processes.