Even though it was conceived in 2008 and first implemented in 2009, ‘blockchain’ looks to be the technology term of the year for 2016. Have a cursory glance at any tech blog, website, or publication and you are sure to come across the term multiple times. While most people know blockchain as a core component of the digital currency bitcoin, it is now being recognized as a critical computer technology that has the power to change the way the world works. If you are wondering why contract management is talking about a piece of technology, just read on.
What is blockchain?
In the simplest terms, a blockchain is a ‘distributed transaction ledger’. What this means is that multiple people and systems can become a part of a blockchain and use their nodes to review the entries in it. Such reviews are visible to everyone in the blockchain and any updates to the chain can only be done with the consensus of the majority of blockchain users. Information in a blockchain can never be erased, making it a verifiable and accurate record of transactions.
Using this technology, digital currencies such as bitcoin have bypassed traditional financial intermediaries, such as banks, and have enabled payment transactions between strangers. The range of applications for blockchain technology is immense and ever expanding.
In the next part of this blog series, we’ll talk about smart contracts, what they are, and how blockchain helps in implementing them.
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