To the extent that this complex and nuanced question can be answered as a “yes or no” question, the answer is: yes. Blockchain will continue to disrupt the financial industry to some degree, and it will continue to be important components for various cryptocurrency markets. The question of whether or not blockchain technology will become a mainstay in the financial sector is a fair one given the lack of tangible results it has yielded for lending institutions despite the billions of dollars invested in the technology. With the announcement of JPMorgan’s recent crypto offering, though, it seems likely that those operating outside the cryptocurrency niche will begin hearing about blockchain.
What is Blockchain?
Blockchain is a digital financial ledger. Multiple computers and computer systems come together to affirm transactions (referred to as “blocks”). The aim is to decrease fraud or tampering with financial transactions and assets. The “chain” part of “blockchain” refers to the characteristics of each block that follows the previous block (or transaction). Each block contains information that reflects both the current state of affairs for an individual’s financial account AND the previous block’s information. Each successive block contains information about the previous block. Therefore, if hackers or bad actors were to attempt to manipulate financial information, he or she would need to change every previous block in a particular blockchain.
As innovative as hackers can be, implementing blockchain technology can be an extremely effective way to authenticate digital financial transactions. The main reason for this is due to the decentralized nature of blockchain. While financial institutions can have robust authentication technology, centralized authorities will always remain somewhat vulnerable to breaches. With the right buy-in from otherwise-unaffiliated third parties, though, blockchain can dramatically increase the trustworthiness of cryptocurrency transactions.
How Do Businesses Make Money From Blockchain Technology?
Again, companies are only beginning to make strides toward monetizing blockchain technology. Businesses harnessing the power of blockchain primarily offer software services (or provide components of these services) to companies in need of “smart” contracts. Other ways to make money off of blockchain include cryptocurrency speculation and per-transaction earnings. A common misconception is that blockchain can only be monetized in the cryptocurrency market. As the next few years will clearly show, that is not the case.
Who Should Care About Blockchain?
If you’re one of those early adopters who has FOMO about things like Bitcoin, Dogecoin, and other disruptors, you should strongly consider reading more into the money-making potential of blockchain technology. If you religiously follow Elon Musk’s Twitter feed, you should strongly consider investing in blockchain companies. If you are interested in efficient business solutions, you should take a close look at what blockchain can potentially accomplish for your company.
No matter how eager you are about getting into blockchain, your company needs a law firm that is passionate about providing innovative business counsel. Our firm focuses on helping entrepreneurs efficiently achieve goals and objectives and would be happy to speak with you and your team about bringing value to your operation. You can reach us by calling (678) 825-4525 today.
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