Blockchain databases represent the latest technology to fire the collective imaginations in Silicon Valley and tech hubs around the world.
They allow a distributed network of database users to create updates in real time – all without the need for a centralized administrator.
Although the original Blockchain rose to prominence as the technology that made Bitcoin possible, it’s now taking off amongst more conventional financial users, such as banks.
Standard databases, such as those built on top of the popular MySQL technology, are protected from both reading and writing by the general public.
If you call your insurance company, for example, the person at the end of the line updates the company’s database based on the information that you provide.From the security governance perspective, this company is the ‘central authority’ administering the database, and having to relay changes through it naturally slows down the update process.
Distributed Blockchain databases, on the other hand, leverage the power of “the crowd” – the online community as a whole – to make the updating process much faster. This is achieved by creating a large global network made up of a replicating series of nodes that reconcile one another in near real time. Because these nodes all contain the same information, it’s virtually impossible for the entire database to fail, or, just as importantly, be hacked.
The same technology that allowed Bitcoin users near-guaranteed anonymity, while also offering a robust currency independent of any national bank, is now set to transform the E-commerce space.
One of the most promising fields for Blockchain-based firms is smart contracts. These are online agreements where the release of funds is automatically triggered when the necessary conditions are met. They have the potential to eliminate the fraud that can occur when conducting transactions with strangers, and are seen by many as the next stage of the Blockchain revolution.
For years, ‘Blockchain without Bitcoin’ was considered by investors to be a mere pipe dream, but now investment capital has begun to pour into disruptive startups that are proving the ambitious, paradigm-shifting technology is capable of driving broad applications. Haim Toledano and Saar Pilosof are two of the heavy-hitting venture capitalists who have recently backed up-and-coming companies in the sector.
“Everyone wants to be able to buy and sell online with total confidence, in terms of the security of their money and their personal information,” explains Toledano. “Now that the technology has finally arrived, we’re about to see an explosion in the overall value of the E-Commerce economy and that’s why the major players of the future will be built on Blockchains.”