What is Blockchain?
Twenty years ago, people had to manually balance their checkbooks. Yes, this sounds ancient, but bear with me. We recorded debits and credits of money coming in and going out of our checking accounts to calculate our available cash balance. Our checkbooks were our personal financial ledgers. Then there was the advent of online banking through which my wife and I could have a joint checking account. My personal financial ledger, once exclusive to me, had now become a distributed ledger made accessible to two people. We both had the ability to view and manage each other’s financial activity with full transparency and accountability, for better or worse. Blockchain is a joint checking account on anabolic steroids. It is a digital distributed ledger that can be used by multiple business parties to conduct financial transactions, trace product movement, record business activities and/or process legal documentation in a secure and recordable environment.
According to ‘The Economist’ magazine, the first distributed blockchain was developed by an anonymous person or group referred to as Satoshi Nakamoto in 2008. It was implemented the following year as the underlying technology for the digital currency bitcoin, where it functions as a public ledger for all transactions. The technology has a strange history and somewhat esoteric application so let’s look at a more practical example to understand how it works.
To learn how blockchain works, who is using blockchain, and the challenges of blockchain read Brewster Smith’s, Principal at Tompkins International, article Blockchain Could Revolutionize the World of Supply Chain Management. Understand what blockchain means to supply chain managers.