Blockchain has been pushed into the limelight by a new and controversial form of digital currency called Bitcoin. The success stories of early Bitcoin investors and the launch of Ethereum, a platform allowing the creation of decentralized applications, brought blockchain and cryptocurrencies to the frontier where decision-makers and executives started to pay attention to this emerging piece of technology. Many curious persons began to wonder how it could help them in their personal or professional enterprises, leading them to believe that this innovation could be an appropriate answer to their business issues. The Economist, on October 31, 2015, published the first well-known article about blockchain (https://www.economist.com/printedition/covers/2015-10-29/ap-e-eu-la-me-na-uk).
As a decision-maker, being educated enough about new technologies and innovations is paramount for your company to explore and experiment with emerging enablers that will bring competitive advantages and help you to reach a steady growth. Being able to thrive in the digital age is more and more a necessity and a complex task, especially because technological breakthroughs and mass innovation trigger a sharp shift in people's consumption habits, as well as geopolitical challenges and economic changes. Being able to consider, evaluate, and incorporate new technologies to tackle your company's business goals has become critical.
With that in mind, you should be aware that blockchain has the potential to be a paradigm shift that can redesign how organizations operate and how value is shared between economic actors. This disruptive technology is said to change how the world works, how entire industries function, and how value is being exchanged and secured. But, as promising as it is, you must act with caution. We are at the dawn of what blockchain can achieve and it is not a hundred percent mature—it's still being considered an emerging technology.
Throughout this chapter, we will consider an illustration of a blockchain application that will help you to picture and grasp the concepts with ease. By the end of this chapter, you should be able to understand the usability of a blockchain in certain environments and conditions, especially when it comes to exchanging value directly between individuals. You should be able to explain basically how a blockchain works, what are its inner characteristics, and how Bitcoin operates without any central authority.
This chapter includes the following sections:
- The significance of blockchain in the business world
- Understanding blockchains
- Breaking down blockchains