Have you heard the buzzword “blockchain” used in conversation and wondered to yourself… what is all this hype about? Or, better yet, what the heck is the blockchain?
Before you start frantically googling “Blockchain for Dummies,” you can just read on. This article curates some of the key points about blockchain presented in Barclays Bank’s informative (and entirely bookmarkable) series on innovation. It demystifies this often mysterious technology. Crowdz was one of the featured companies in the series, and we are honored to have been included.
Here are a few takeaways from the Barclays series:
Blockchain came onto the scene about ten years ago in association with Bitcoin (the first popular cryptocurrency) and it received a lot of attention at the time. However, it’s important to clarify “blockchain is not a cryptocurrency in the same way that the Internet is not a website,” says Barclays. Blockchain is the underlying technology and cryptocurrency is just one of the applications for it. A good way to remember it: Facebook is a social networking app. It is not the internet. Bitcoin is just one use for the blockchain, much as Facebook is just one use for the Internet.
Barclays explains blockchain simply: “Blockchain is a technology that allows us to distribute and synchronize data across different parties, using cryptography (including encryption) to secure the data and ensure any tampering is evident.”
Every transaction that takes place accross a blockchain is recorded on blocks that are linked to other blocks sequentially. Copies of each block are automatically distributed accross the entire sequence of these blocks, i.e., over many computers, making the chain of blocks extremely transparent and secure.
In a video featured on the Barclays home page, Crowdz’s CEO, Payson Johnston, explains that blockchain is important becuase it allows everyone to audit and view a single register. As a result, anyone involved can see the record of a transaction without having to rely on a centralized third-party’s credibility, judgement or turnaround time. The distribution of information in this way explains why blockchain is often referred to as a “distributed ledger” technology.
Crowdz + Blockchain
Johnston notes that blockchain is often referred to as Internet 3.0 or Web 3.0. As Forbes magazine explains, “A new wave of networking technologies, also known as Web 3.0, promises to return the internet to the hands of users. This movement utilizes advances in peer-to-peer (p2p) technology like blockchains to build services that protect users over profits. Its decentralized, peer-to-peer nature provides a hard technological cap to the possible accumulation of power and data in the hands of monopolists.”
At Crowdz, we use blockchain as the foundation of our platform for an even more practical reason: to speed up and automate transactions in a way that was never before possible. Currently, if your company emails an invoice to a client, that invoice needs to be downloaded, possibly even printed out, and information keyed into an accounting system.
With blockchain, however, the instant an invoice is transmitted over the Crowdz Invoice Exchanges, its digitized data is instantly and securely transmitted to all relevant parties, such as customers and funders. Futhermore, blockchain data is interconnected which means all orders, invoices, payments, documents and related transactions become intrinsically interconnected, making a snap of historically laborious payment reconciliation processes.
The Future is Now
As you read this, all kinds of blockchain-based applications are emerging, as a growing number of startups and established enterprises increasingly leverage this technology. Blockstack is building the internet for decentralized apps. Lockheed-Martin is integrating blockchain into its development processes. Ford is exploring blockchain for inter-vehicle communication systems. Omega Grid’s blockchain-based technology lets energy businesses manage peer-to-peer energy sales. Lemonade and Metlife are using blockchain for insurance. And De Beers even uses the technology to track their diamonds and to ensure their authenticity and provenance.
As applications like this appear and flourish across all sectors, Crowdz is positioned to become and reamin industry standard for blockchain-based invoice payments and financing.