As a Benelux PR agency for B2B and B2C businesses in ICT and consumer electronics, we like to keep up with the latest technological developments. That is why I attended the Dutch Blockchain Conference last month, an initiative by trendwatcher Vincent Everts. With keynote speakers including Neelie Kroes and blockchain expert David Birch, who described blockchain as “not a technology, it’s a religion”, it was the place to learn more. The media are increasingly reporting on blockchain, but what is it and what can we do with it? In this blog, I will try to explain.
It all comes down to trust
When you buy organic meat, how do you know it really is organic? When you vote in an election, how do you know your ballot is counted? The same applies to financial transactions: trust is essential. Countless transactions take place worldwide and are recorded in ledgers. Those ledgers stand alone and are often not shared with the outside world. To enable and approve transactions, we rely on third parties such as banks, governments and accountants, as well as on the money in our wallets. Unfortunately, that trust sometimes breaks down. Blockchain offers a way to build a system in which participants can check records and trust one another.
How does blockchain work?
Blockchain stores information across a network of computers, making that information both decentralised and distributed. In the model described here, no central organisation or intermediary owns the system: participants can use it and help maintain it. That makes it very difficult for one person to manipulate or corrupt the network. Participants use their computers to store bundles of data submitted by others: blocks in a chronological chain. Blockchain uses cryptography to make unauthorised changes detectable and protect the integrity of the records.
Bitcoin
Bitcoin is the best-known application of blockchain technology. This digital currency can be sent to anyone, even a complete stranger. It differs from traditional currencies, credit cards, PayPal and other payment methods because transactions do not require a bank or intermediary. Participants around the world use computers to validate transactions and maintain the network, with miners receiving rewards. Bitcoin uses blockchain to track ownership and prevent the same funds from being spent twice.
Future possibilities for blockchain
Cryptocurrencies such as Bitcoin and Ethereum are only the beginning. In future, blockchains could manage and verify data for businesses run entirely by algorithms. One speaker at the Dutch Blockchain Conference was Jan-Peter Doomernik of energy company Enexis. He presented a groundbreaking, unusual and carefully developed vision of the future. In his scenario, blockchain, self-driving vehicles and autonomous energy systems could provide everyone with free energy and a universal basic income by 2035. How would that work? Watch his video.
Hype or not, blockchain has enormous potential. Neelie Kroes compares it with the internet of the early 1990s: a relatively unfamiliar technology that could profoundly change our economy and lives. Research by our client Indeed found that blockchain was already having a substantial impact on the labour market. As more jobs involving blockchain technology become available, demand for experts is growing and vacancies are proving difficult to fill.
Blockchain’s communications challenges
Even leading blockchain specialists acknowledge that wider adoption is held back by the complexity of explaining the concept, rather than technological setbacks alone. Governments, businesses and consumers first need to understand what blockchain is and what it could make possible. That will present a major communications challenge in the coming years. How can a business communicate effectively about qualities such as security and reliability, or explain blockchain to consumers who have never heard of it?
Want to learn more about blockchain? Watch this video. Curious about how we can help position your company as a blockchain thought leader? We would be happy to discuss it.
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