Blockchain and the technologies that have sprung up as a result have taken the world by storm in the past few years, and many investors have even added some technology with blockchain as its underpinning to their financial portfolios. Although blockchain became a well-known idea in many younger entrepreneurial conversations, the world at large is learning about it and its future. Even with the cryptocurrency markets going down in recent weeks, the world is an ever-evolving place, and blockchain, as a foundational idea, is very much worth learning about.
What is “The Blockchain”?
When you think about blockchain, think about online transactions being tracked in a ledger, maintained by a network of computers in a way that makes it very difficult to hack. Picture an actual chain whose links can’t be unlocked from each other without everyone (who cares to look) knowing all about it.
In real life, our mortgage documents, passports and marriage or death certificates have official stamps or physical embossing that make them harder to forge or fake. Blockchain is a way of providing similar (some might say better) ways of securing online transactions.
Blockchain allows individuals to deal directly with each other without a controlling intermediary like a government, bank, or any third-party, and it was at the core of what made Bitcoin, the original cryptocurrency, possible. This method of decentralized accounting for who has paid or given or traded what online, and with whom, makes blockchain transactions, cryptocurrencies and now other kinds of transactions very secure.
The list of records is linked together using cryptography, and every transaction made is independently verified, time-stamped, and added to a growing chain of data. Once recorded, the data cannot be edited or changed in any way.
How does it work?
When someone buys cryptocurrency, for instance, the transaction is entered by a network of powerful computers, and the sale is then cryptographically confirmed and added to a block on the distributed ledger. The block is now permanently chained to all previous blocks of crypto transactions, using a cryptographic fingerprint.
Blockchain appeared out of nowhere, it might seem for some, but the fact is that the concept of blockchain technology first appeared in 1982 in the academic world. Then in 2008, a paper by Satoshi Nakamoto appeared with the title, “Bitcoin: A Peer-to-Peer Electronic Cash System,” which brought the term “blockchain” into the world, when this new crypto payment system was born.
The future of Blockchain with luxury brands
Many of these technologies still feel quite young, but there are already some fascinating ways that this idea of blockchain and its locked ledgers are helping many kinds of people and industries, including high-end digital art and fashion.
In the early 2000s, we became used to digital music, images, and video being easily shared online from person to person, account to account, device to device. For digital assets that warrant it, however – a piece of digital art cryptographically signed by its creator, for instance – the blockchain helps us to track every single transaction, every single digital hop that an NFT has made, so to speak. If you’ve read our article on NFTs, you know that these “non-fungible tokens” can only have one owner at a time, which is tracked and verified using a blockchain.
Fashion technology, and even custom or small-run sneakers, are using blockchain to create certificates or even whole platforms the offer unique, tamper-resistant proof of ownership that follows its owners throughout the asset’s life cycle, even if it changes hands. Part of the appeal of high-end timepieces is the provenance, or life story, of each individual watch, and several of the oldest Swiss brands have begun authenticating special vintage pieces using digital wallets that tap into blockchain technology.
Blockchain networks can also help to securely store and exchange patient data between healthcare providers, and they may soon allow viewers to be alerted when campaign videos may be “deepfakes,” or altered in some way. So, whether cryptocurrencies, the original users of blockchain, ever completely replace traditional government-backed money, the world will still be using blockchain technology in inventive ways.