Most of the technology industry is still coming to terms with all the ramifications of blockchain technology. While Bitcoin and other digital currencies are certainly grabbing their fair share of headlines, the less famous but no less important story is the technology of the blockchain itself, which is likely to change how we think about data and how information can be stored and verified in the future.
Simply put, the blockchain makes it possible to create and exchange unique data, something which up to now has either been impractical or terrifically expensive. Once something like uncopyable data is available, it opens up at least as many possibilities as the concept of infinitely copyable data did decades ago.
Authentic Record Keeping
With current technology, there is no such thing as an unaltered original digital document. Any document can be forged, tampered with, altered or fabricated. The reason is any document can be copied.
What blockchain technology does is it turns digital information into a real-world paper document equivalent. In fact, blockchain-protected documents are impossible to forge, because the nature of blockchain technology makes it impractical to reproduce the complex encryption models required.
The business applications for unaltered original documents are as numerous as they are in the real world. The difference is blockchain-protected documents are less expensive and potentially more reliable plus they can be printed without fear of theft or forgery, as the original is locked away in a digital vault.
The second most important feature of blockchain technology is its distributed nature. Like the network itself, blockchain-protected information is shared among numerous computers. This makes it exceedingly difficult to create false records, because there are always other copies of the original unaltered data in the system. Not only do forgers have to unravel the encryption, they would have to simultaneously alter every copy of the document across the network.
For businesses, the concept of shared authentic data should be obvious. Consider an attorney-client relationship. Both would have authentic documents verified by the same blockchain. Any signature or filing would become part of a permanent chain of custody, suitable as evidence in any court of law and backed by strong encryption every step of the way.
The distributed encrypted accounting ledger is but one expression of the advances blockchain has already made possible. It is only a matter of time before businesses find ways to create value with it and turn that value into products and profits.