Trust is an essential building block for all forms of transactions. Without trust it is hard for anything to progress, for businesses to be successful, and for relationships to grow. In Edelman’s annual trust barometer study, only 33 percent of American citizens felt they could trust their government in 2017. This is a 14 percent decline from Edelman’s study in 2016. The drop did not stop there with a trust in businesses dropping from 58 percent to 48 percent. It’s not hard to imagine that media and social networks also saw a decline with fake news littering all sources.
In the cryptocurrency world, we are seeing a bridge of trust being built with blockchain, an encryption technology.
Blockchain is cryptocurrency’s way of hard-wiring trust into transactions that otherwise would leave room for doubt. Blockchain is said to be the foundation of bitcoin which surged to a $19,000 value last year.
While bitcoin’s value has been volatile with surges and drops over the last year, blockchain has been more stable. With 1,500 other cryptocurrencies up and running to date, it can be hard to tell which is true and which is just a scam, but blockchain is proving most dependable.
Blockchain has been adopted and explored by companies like IBM, Microsoft and Intel, Goldman Sachs, Nasdaq, Walmart and Visa.
In fact IBM, Microsoft and Intel are offering blockchain as an additional tool for transactions.
Why is blockchain trusted by these big names?
Blockchain works as an objective digital ledger. There are quite a few startups who see that it would be beneficial to add blockchain to voting, lotteries, ID cards and identity verification, graphics rendering, welfare payments, job hunting and insurance payments.
Gartner, an analyst firm, estimates that blockchain will provide $176 billion in value to businesses by 2025 and a tremendous $3.1 trillion by 2030. This is potentially a revolutionary deal, when you think about it.
So what exactly is blockchain?
Blockchain is an ever-expanding group of data blocks; a collection of transactions resides in each block such as the purchase of your car or the mortgage on your house.
Blockchain networks spread the data out to computers that range into the thousands. Each computer has its own copy of the blockchain transactions.
Having the data strung out among thousands of computers guarantees that no single party controls the data. Data is clearly seen between two parties when one business sells assets to another business. Blockchain eliminates the need for lawyers in transactions as there is only one accounting database.
Gone are the days where there are two accounting databases with transactions between companies. The trust is kept with Blockchain’s security.
Blockchain keeps the data secure by using cryptography which are mathematical methods of keeping data secret and proving identity.
Brian Behlendorf, executive director for the Linux Foundation’s Hyperledger project for blockchain software stated, “You can take a network of parties that didn’t have prior experience working with each other — that didn’t have reason for trust — and still find a way to build a transaction record or a history of the truth.”
With Blockchain’s extra-secure cryptography, it is revolutionizing trust in the cyberspace world. With so many invested in cryptocurrency, it looks like this is just the start to building a new definition of trust in society.
(To learn more about how blockchain works, read Blockchain: Transforming More than Cryptocurrency.)