Blockchain technology spells the end of middlemen
“It’s called the blockchain, the technology that underlies the cryptocurrency bitcoin. A blockchain is essentially a transaction ledger, much like the record-keeping systems employed by conventional financial firms, such as banks. Traditional ledgers are owned and maintained by one institution, and access to them is restricted to prevent tampering. A blockchain, by contrast, is hosted on a network of computers, which verifies every new bitcoin transaction every 10 minutes, then adds a ‘block’ made up of those transactions to the chain of transactions that came before. The result is an ‘immutable cryptographic ledger that is open, available to anyone and can be shared by anyone,’ says Hill.
Blockchain technology’s potential beyond bitcoin is huge: It could replace the multi-trillion-dollar market in third-party verification services that underpins the modern global economy. Services and institutions that act as middlemen to facilitate and verify financial transactions, contract relationships, record-keeping and asset transfers could all be disrupted by blockchains, which proponents say offer a cheaper, faster and more secure way of doing business. Investors are clearly enthusiastic about the sector’s potential: Bitcoin- and blockchain-related startups attracted more than half a billion dollars in funding last year. In November, Blockstream took in $21 million from investors, including LinkedIn executive chairman Reid Hoffman.”