What Do Google Docs And Blockchain Technology Have In Common?

No, it isn’t anything to do with bicycles, but it has a lot to do with how you’ll do finance in the coming years.

Blockchain will do to finance what the world wide web did to do the media. A clunky, antiquated and elitist financial system is being ripped asunder by blockchain. For the first time, two parties can conduct business together without the need for a middleman to verify that they are who they say they are. Trust is established through clever computer coding, network consensus and collaboration between parties.

What is Blockchain?

Blockchain is a way of recording data from transactions to contracts. Blockchain records anything that needs to be verified as having happened. One of the many things about blockchain that is so interesting is that you don’t store the details you store the fact that it is real and has happened.

Confused? That’s fair enough, I mean this isn’t the sort of stuff you’d usually hear in your average pub quiz. A simple way to think about Blockchain is to think about the way Google docs is used.

When you write something on Google docs and share it with a friend or colleague, rather than having to wait for them to make edits and then send it back to you, you can watch, as it happens, the editing that the recipient is making.

All the while Google Docs is keeping a record of all the changes that are being made.The origins of the Chain…Whilst it sounds very futuristic the origins of Blockchain go way back. Dutch traders devised a system called ‘balance carried forward’ (I know, catchy right?!) in which the previous balance on an account is carried over to the next billing period. Blockchain is merely the newest version of such a scheme.

Why is Blockchain so clever?

For a few reasons, really. One is the increase in security that Blockchain offers, by having potentially thousands of copies of the same document across dozens and dozens of servers it means that hackers would have to obtain every single copy simultaneously in order to hack it successfully – something that isn’t going to happen anytime soon.

The Blockchain database cannot be converted back to a former state, this changes the digital footprint of the document meaning a thousand and one red flags will spring up if it is being tampered with.

Why on earth should finance firms be interested?

In an age where everything is instant, including people’s demands for products and services, the slow sluggish world finance is going to go through a shake-up, thanks to Blockchain.

The speed with which transactions are done which should interest finance firms for obvious reasons. The tech that’s used globally is a little outdated, to say the least, if finance firms began sharing data using their own customer Blockchain services then the need for the middleman disappears.

We will start to see greater implementation of automation in the financial world which can only be a good thing, for business and consumers. Businesses and consumers, from around the world, too, creating a world in which huge institutions are obsolete means finance firms can expand rapidly and quicker than they had ever planned.