Blockchain for non-tech people

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I am a generalist, but marketing and business development are what I enjoy most. For the bigger part of my career, I’ve worked in tech companies, so I’m not a complete Luddite and I know my way around (at least when it comes to digital marketing). I’m passionate about marketing and the philosophy behind it, but I think most of my colleagues (some of them will hate me for saying this) don’t really understand what they are doing.

When I started working for my current company, I knew little to nothing about blockchain — every time I heard the word, the light “CRYPTO!!!” in my mind started, and that was pretty much it. And I’m so grateful to everyone for the blockchain crash course I received early on.

The one thing that people who work in tech companies usually share is their fascination with new technologies, mainly those at the bleeding edge — blockchain and AI, to name two.

I’m fascinated too, but not for the same reasons.

What is blockchain?

It’s one of those things that sound really great until you try to explain it in simple words and realize how many eyes start to roll around your head (if you are lucky) or how many questions pop up about the meaning of words like “decentralized,” “redundant,” and so on.

“Blockchain is a decentralized technology that creates an unchangeable record of data.” It sounds impressive, but it’s not, really. What does this sentence mean? And how exactly does it work?

Here’s the thing: I’m not going to teach you how blockchain works. It’s magic, and the best I could do is get someone from the development team to show you, but then it wouldn’t be magic anymore.

I’m going to tell you what are the potentials of this technology, what does it change, and why is everyone these days crazy about blockchain. And most importantly: blockchain isn’t actually that new and scary.

Blockchain (the technology) is a mechanism for data storage and transmission. It allows users to modify/change/update/delete entries only with the permission of the majority of system participants.

What does it mean? The first time I heard about Blockchain, my immediate reaction was “Oh sh*t, here we go again”. I’m not the only one who had this reaction, which makes me think it’s a valid starting point for any discussion on Blockchain.

The majority of new technologies (the cool ones) promise to change our world forever and make it rain cash from chocolate skies; blockchain is no different. However, unlike most other new technologies, blockchain is not a self-contained product; it’s a concept. And like every other (nowadays) technology, it enables others to build tools on top of it.

Why is everyone suddenly crazy about Blockchain?

Because we all know that our world runs on data and information exchanged between the participants in the market. Blockchain offers a way to change the structure of data exchange with no intermediaries, so it’s natural for everyone in the market to think about how this technology could be used in their own line of business or industry vertical.

But why is blockchain so important? Why is this new technology significant?

Blockchain is actually an old idea built on top of new technology. The underlying mechanism was first established by Stuart Haber and W Scott Stornetta in 1991, although the concept was introduced much earlier. In 1991, both researchers were working in the cryptology department at the Stanford Research Institute in California. One day, they noticed that “timestamping” documents is one of the most basic yet powerful ways to prove that something existed when you say it did.

A timestamp proves that a certain document (it can be anything: an email, a text file, a photo) existed at the time when the timestamp was created. What’s more important is that it cannot be forged or manipulated by anyone; it’s as if you were there with the author of the document at the very moment when they created it.

Haber and Stornetta’s idea was to use cryptography to create a secure timestamping service, so it could be used by banks, insurance companies, and other financial sector institutions to prove that certain data existed at a particular time.

This is how the concept of blockchain was born.

You are probably wondering how does blockchain work? Well, the moment you enter any data into a system that follows the basic idea of blockchain, you receive a unique ID and a timestamp. Then the data is encrypted and added as a new block to the “chain” which can’t be changed or manipulated later on.

The main idea here is that every single change in the system needs to be verified by everyone before it’s actually done. That means that after you’ve created your entry, no one dares to delete/change/update it before verifying this action via majority consensus among all participants of the network.

So who are the participants in the blockchain network? How do I know my data is secure?

There are 3 types of participants in a blockchain network: those who create data, those who verify the data, and those who receive data. Generally speaking, you can recognize these participants as miners/farmers(creators), validators/witnesses (verifiers), and users.

Everyone is able to join any blockchain by installing appropriate software, so it’s important to know if your device was secure when installing it. Blockchain security depends on the protocol used in the specific network: some protocols need more resources than others; some store all data whereas others store only hashes and signatures; some use public-key encryption while others rely solely on symmetric cryptography.

One of the most important concepts related to blockchain development is decentralization. You’ll be able to use blockchain only if you install an app that acts as a node in the network. There are many apps, but it’s important to understand which one is considered to be the most reliable and secure.

Why is blockchain the next big thing?

What makes blockchain really interesting is that you can build tools for almost anything on top of it: e-commerce marketplaces, voting systems, decentralized cloud storage services — you name it. So yes, people are crazy about blockchain because it’s a new technology with enormous development potential.

But what does it change? How is Blockchain going to change the world? What are its future prospects?

The answer depends on who you ask…

That being said, let’s try to explain some blockchain basics so even the most “blockchain illiterate” marketers could understand how it works and why everyone is obsessed with this technology right now.

Blockchain allows you to store data that cannot be faked or manipulated.

This makes it secure and fraud-proof which is good for e-commerce platforms, banks, insurance companies — basically any business sector can benefit from blockchain creation.

Of course, this technology has some limitations… First of all, the more people use it, the longer it takes (the more time is spent on carrying out verification) to add new blocks to the chain. Second of all, if everyone runs an app like this on their devices/computers at home there won’t be enough resources to support such a big number of users.

However, widespread adoption could happen very soon because IoT devices are becoming cheaper, more accessible, and more powerful and more powerful than ever. So, if you have a laptop or a smartphone, you probably already have access to this technology.

There are many areas that could be improved thanks to blockchain implementation.

Just imagine that every time you buy something with your credit card it will be recorded in the public ledger — nothing gets lost so no one dares to charge people twice for the same purchase! Plus, once you type in your password banks won’t need money anymore because they can just transfer digital assets directly between each other without even touching them. And what about doctors’ records? They could be safely kept in a decentralized database that can’t be hacked or manipulated. Real estate? Let’s do an international trade without third-party involvement! And while we’re on it, let’s eliminate wire fraud along the way! And so on…

But let’s take a moment to talk about smart contracts.

They are the heart of the matter. Smart contracts help blockchain users exchange money, properties, shares, or anything else without any human involvement which makes transactions faster, cheaper, and more reliable than ever before.

Simply put, it’s a piece of code that helps you exchange money/data/whatever with other people on the blockchain network without middlemen (lawyers, banks). Once you agree on certain conditions (written into this code) both parties need to stick to their end of the bargain… If they don’t — there are penalties included in the smart contract itself.

What’s great about this technology? Well, starters it eliminates third-party involvement, which saves you money. But why is it so important? Because of the fact that information on a blockchain exists as a shared — and continually reconciled — database.

But how do smart contracts work exactly? Well, imagine there’s someone who holds 10 BTC and they need to give it to another person. For example, his contractor did some work but hasn’t been paid yet. Blockchain helps two people agree on certain conditions without involving anyone else. They both sign the smart contract with their private keys and boom — it’s done! The money is transferred to its new owner, no questions asked.

Blockchain technology could help you eliminate fraud in any situation where you pay for some service or product. Let’s say you hire a guy to fix your roof. He shows up to do the job but says he needs $200 extra for building materials. Well, what if blockchain can help you prove that this guy never bought any materials? That way, if someone tries scamming you just take them to court and show everyone that they lied. This is of course, a bit far-fetched and your local handyman probably won’t have a clue about smart contracts, but you never know what the future holds.

Plus, using blockchain could completely change our everyday life. It can become a thing of the past to wait for your bank to transfer funds into your account, because why shouldn’t it be just as easy as sending an email? And have you ever heard about wire fraud? Just imagine how many cases like this would be gone with blockchain (and smart contracts) in place. It’s really mind-blowing to see all the possibilities that blockchain offers.

And what about fees? Wire transfer is risky — it should be expensive because you never know who will try scamming you this time! Banks are making money by charging us for everything they can think of simply because they are the only ones who have access to financial records. Blockchain is a different story though. f you have ever sent cryptocurrency from your wallet to another, you know how fast and effective blockchain can be when it comes to processing transactions because there are no banks involved here!

None of this makes sense yet? Don’t worry — blockchain still needs a lot of time before its benefits will be apparent to everyone. But you gotta admit, it’s pretty cool. This is certainly a great step towards making the world a better place.

Blockchain technology is still in its early days so you’ll have to wait a little longer before the final verdict comes. People are trying to figure out how to use blockchain and what can be improved with it. Meanwhile, it’s important to learn about this new technology and understand what benefits it brings and how it changes the world we live in.

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Marketing executive — Bookworm — Adrenaline junkie — Remote-first evangelist — Blockchain enthusiast

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Joana Leventieva

Joana Leventieva

Marketing executive — Bookworm — Adrenaline junkie — Remote-first evangelist — Blockchain enthusiast

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