Beyond cryptocurrencies, capturing the imagination of experts is the innovative technology behind it all, the blockchain. Venture capitalists are taking note too. In 2018, VCs pored $900 million into blockchain companies, and they’re on pace to eclipse that figure for 2019. At its core, the blockchain is an unchangeabe record of transactions stored across a network of computers. It gets its name from the way it works: a block is record of new transactions that, when completed, is added to the previous transaction, creating a chain of blocks.
While the bitcoin blockchain stores records a financial transaction, a blockchain is essentially just a special kind of database that can be used to store any kind of information. A blockchain can also store and run computer scode called “smart contracts” – and that’s what has excited investors and experts.
“Smart contracts avoid some of the trust issues that normally come with contracting,”say Brian Wolfe, an assistant professor of finance at the University of Buffalo. “They’re built so users can set up on agreement, and when the terms are met, ther contract will be fulfilled”.
Let us imagine two people want to exchange $100 at a specific time in the future when a given set of conditions are matched. The conditions, oayout and parties’ details would be programmed in and once the conditions are met the funds would be transfered automatically. Technologists envision a future where blockchain is used in a variety of applications, including stock trading, bank operations, digital music copyrighting, arranging ride-sharing or even voting.
But according to Wolfe, there are still tons of tehnical hurdles for blockchain to overcome to become a premier and turn all of these big ideas into reality… “One of the problems we’re having is getting external event information into the blockchain. How do I get a real-world occurrence like the price of a currency or the result of an election into this list of transactions that all these computers agree have happened?”
It is tricky but, if resolved the possibilities are endless. This has the potential to help with the present day contracting issues, that we often find ourselves running into all the time. It’s like the begining of the internet again – who ever imagined that we’d go from email to Uber and Airbnb to Video Calling 20 years ago!