By now, you have probably heard of the term “blockchain” somewhere amidst discussions of digital currency, banking, and the future of finance. Many believe it’s going to revolutionize the world — from Wall Street adopting blockchain technologies by 2018 to companies trading publicly with the cryptocurrency Bitcoin. But what exactly is blockchain?
The system of Blockchain has been quietly growing since its inception in 2008 by Satoshi Nakamoto (the pseudonym for the suspected group of individuals who co-created Bitcoin). Blockchain serves as the underlying infrastructure for Bitcoin, a form of cryptocurrency that has become increasingly popular: at the time of publication, 1 XBT was worth $1,031.14 USD. Blockchain serves as a peer-to-peer network that takes place privately and exclusively between two users. Information stored in blockchain technology is completely decentralized from any external influence, and all movement of information is accounted for through a blockchain ledger.
Outside of banking and currency, blockchain is gradually changing how business is done in other fields. The most popular form of blockchain development in enterprise technology is Ethereum. Originally founded in 2013 by developer Vitalik Buterin, the company was developed by the Swiss nonprofit Ethereum Foundation. Ethereum is a custom-built blockchain that can be used in payment systems, crowdfunding, gold investing, and other cloud computing functions. The custom-built blockchain system has attracted the interest of some big names in technology, like Accenture, Microsoft, Intel, several large banks, and blockchain startups around the world.
Global corporations like Maersk are adopting blockchain systems for record keeping and information sharing. This industrial shift has elevated blockchain developers like Ethereum to new heights. Almost remarkably so: Ethereum (ETH) hit an all-time high, trading at over $50 a share — an almost four hundred percent increase from last month when it sold at around $13 a share (at time of publication, it was trading at $44 a share). While the all-time high value only lasted a few days, the implications for Ethereum are clear. Blockchain systems are well on their way to becoming the new industry norm.
As mentioned, corporate giants like Microsoft, JPMorgan Chase are working together to form the Enterprise Ethereum Alliance (EEA). The EEA aims to create a standard of the Ethereum software so that business around the world can collaborate effortlessly. So far, 30 companies have joined the nonprofit initiative. It’s been speculated that the formation of this entity is what’s behind the recent surge for the blockchain company.
The benefits of the EAA could mean greater transparency, reduction in costs, and more appeal to national and international governmental organizations. While the consistency of the Ethereum trend isn’t a guarantee, it’s definitely something worth keeping an eye on.
Disclosure: Several members of the Futurism team, including the editors of this piece, are personal investors in a number of cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.