In the past couple of years, many technical buzzwords have entered into our collective vocabulary. You might have heard words like “cryptocurrency,” “NFTs,” “the blockchain,” and “web3,” among others. If all of that sounds like gobbledygook, you’re not alone, but it’s worth learning the basics of these concepts just to understand how the global economy might be changing in the coming years.
One of our resident bookworms, Jim Dickson (who researches new investment markets for us), shared this interesting book with me that I think can serve as a good primer to this new age of technology and finance. Blockchain Revolution: Understanding the Internet 2.0 by Jeffrey Hauzer was published in 2018, which might make it seem “outdated” in terms of the tech world, but it’s still a relevant and informative read. I recommend picking up a copy of your own, but I’ll summarize a couple of key takeaways.
What is “blockchain”?
According to Hauzer, “A blockchain can be defined as a public record whose existence is limited to the Internet or virtual world.” This public record is “maintained” across several computers in what’s known as a “peer-to-peer network” (kind of like Wikipedia, but more reliable and less centralized than just one website). That’s a very simple definition of what is in actuality pretty technical, but it’s all you really need to know about what it is. It’s the “why” that Hauzer finds more interesting.
So… what’s important or unique about blockchain?
It’s through the blockchain that certain types of data or currency can be shared — without a central authority overseeing the transactions. The decentralized nature of blockchain, and currencies built for it, like Bitcoin, is what makes it appealing to so many people (including Millennials, who are choosing to invest into cryptocurrency over other “traditional” options. We wrote about that here).
Cryptocurrency (which refers to digital currency exchanged on the blockchain) is what most people think of when this technology comes up. However, Hauzer delves into other applications of the blockchain and why it’s truly a “revolution.” For example, he cites the music industry: musicians can produce and share music on the blockchain without the need for record labels or other industry middlemen who would control how their music is distributed. And in healthcare, Hauzer claims blockchain “can completely revolutionize the way in which people’s health records are maintained” by making the data easier to store, maintain, update, and access across practitioners and medical facilities.
If you’re wondering what makes the blockchain different from just any ol’ website, it comes down to decentralization and security. Although blockchain tech isn’t perfect or unhackable, the nature of blockchain means that data is never reliant on “one single point of failure.” Everything shared on blockchain has a specific “hash,” or marker, that determines its authenticity and uniqueness. It’s truly a different approach to how we interact with almost anything on the internet.
This is just a general overview, and I recommend picking up a copy of Blockchain Revolution if you’re curious to learn more. My team and I have more to share with you on this topic, especially when it comes to investing and finance, so keep an eye out for future articles.