[reading time: two minutes]
About a month ago the Harvard Business Review published an article on blockchains upon which I commented: “Could blockchains solve our inherent inability to trustfully deal with money?”.
Fast forward a month, now blockchains are all the rage (surely not because of my tweet). But deep down, what are they? Why are they useful?
I’m going to TRY to summarise the whole Blockchains issue in 140 words (not characters unfortuntely) to make it a digestible, bit-sized (pun intended), “primer” to the topic.
Let’s begin the feat.
A blockchain is a distributed database where each of its component parties can access it in its entirety: keywords here are transparency, efficiency, automatisation and verifiability. As a database, it just lists the records of interactions (or transactions) comprised with time, date, and author (that can remain anonymous). These records are irreversible and cannot be deleted by any party of the blockchain, making it an incredibly useful system of transaction recording for financial exchanges (i.e. a ledger). It is a peer-to-peer mean of transmission, bypassing central servers (and thus also banks), travelling node-to-node rather than following the typical client-server architecture. It was created as a pivotal component of the BITCOIN system in 2008 and, as written in the papers, being a foundational technology, rather than disrupt current business models, it could help ameliorating or building new ones upon its foundation.
We sort of made it.
In case that this brief explanation didn’t satisfy your curiosity (and I hope indeed it didn’t), here’s a bunch of additional resources:
- Harvard Business Review: the truth about blockchains;
- Harvard Business Review: non-financial blockchain implications;
- The Economist: the great chain of being sure about things;
- Investopedia: blockchains.
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