Explaining Blockchain

Blockchain illustration

What Blockchain is, why it works, and why it might honestly go on to change rather a lot…

This is one that works in a number of ways. Written for a client, Viaccess-Orca, it examines an extremely topical subject and ties it in seamlessly with its core business while also standing up as a piece on its own. It’s the sort of piece that exemplifies good content marketing, especially when taken out beyond 1500 words with all the SEO optimisation, long tail keywords and more that a high-profile post requires.

The research for all this is best described as intensive…

You can read the full piece here, Blockchain, Bitcoin, and Their Effects on The Video Industry, but here’s an excerpt.

Essentially, the elevator pitch is that it’s a way to record transactions in a distributed manner with no centralised authority. In many ways this makes it very similar to a peer-to-peer network such as the ones that power BitTorrent. Basically blockchain fuses two things together, a network and a database, but also has additional rules and some built-in security measures that mean it maintains its own integrity and its own history. There are a number of key characteristics that make blockchain what it is:

  • Distributed ledger: identical copies of all records are shared between all participants
  • Chronology: Each block of data is timestamped and refers to the data in the previous block of the chain. Updates occur across the ledgers in near realtime
  • Consensus: All participants in the blockchain collectively authorize and approve transactions
    Digital: Any information that can be expressed in a digital format can be stored in a blockchain. This is given extra power by the concept of ‘smart contracts’ which both define what can be done with the data and automate transaction tasks.
  • Cryptographic sealing: Blocks, and therefore transactions, cannot be deleted, edited or copied. The information recored is immutable

Put all this together and you have a powerful system for recording transactions and tracking assets through a business network at both low risk and low cost. And, of course, an asset can be anything, from a tangible thing such as a car, to an intangible object such as intellectual property or video content.

One of the counter-intuitive things about all this is that by removing the need for trust it creates trust. Because every transaction builds on the previous one — each block contains a digital fingerprint called a hash, a timestamped batch of recent transactions, and the hash of the preceding block — any errors or deliberate tampering can be quickly detected, particularly as every participant has access to the whole ledger. The concept as a whole is inherently self-policing and, when regulators are involved, they have easier access into the totality of the records than ever before.

IBM’s eBook Blockchain for Dummies provides a good explanation about how all this can simplify business processes using car leasing as an easy and clear example . Under a traditional model, manufacturers, dealers, leasing companies, lessees, and finally scrap merchants all have to keep their own individual records of ownership transfer as a vehicle makes its way through the system. And while all feed their own data to an overseeing regulator who looks after the processes involved, the potential for error and even fraud is high, as are the costs.

A blockchain model sees all these parties become network participants that can see where any vehicle is at any time and, using smart contracts, transfer it between them. Transaction times are thus cut dramatically, as are costs.

Have a read of the rest, including details of how Blockchain fits into the video industry, here: Blockchain, Bitcoin, and Their Effects on The Video Industry