If you have been living in a cave for the past several years, you may not be familiar with the term “blockchain”. But companies like big, influential companies like Wal-Mart and Amazon — and even smaller businesses like grocery stores and fast food restaurants — are paying attention to blockchain and are even beginning to use it in their businesses.
For the uninitiated, blockchain can be a confusing concept. Basically, it has to do with the way businesses use publicly accessible online ledgers to record and confirm transactions involving Bitcoin and other “virtual” money.
By recording transactions involving virtual money exchanges publicly and permanently, it creates a permanent public record, which legitimizes these cryptocurrencies, essentially reinforcing their value.
True Value of Bitcoin
Unlike the US dollar, the British pound, the Euro, or other types of paper money, Bitcoin and other virtual currencies don’t actually exist in the real world. There are no paper bills or metal coins that you can hold in your hand or put in your safe.
Nor are Bitcoin and other cryptocurrencies backed by government treasuries. So there is a genuine need for people using these currencies online to have confidence that they are going to continue to hold their value. After all, if somebody buys products from you and pays you in Bitcoin, yo want to be sure you can use this virtual currency to buy products, pay wages, or use it the way you would actual money.
That’s where Blockchain comes into play.
“The Blockchain is a public ledger where transactions are recorded and confirmed anonymously,” writes the website DataEconomy. “It’s a record of events that is shared between many parties. More importantly, once information is entered, it cannot be altered.”
Permanent and Public
Unlike business’s profit and loss ledgers, blockchain isn’t private. It’s public. That means it can be accessed by anybody, anywhere, and at any time — which is what gives it legitimacy.
It’s a sturdy and secure decentralized system that is perhaps more tamper-proof than the type of private data banks that are being hacked with increasing frequency and ferocity by malicious online hackers.
Blockchain can’t be hacked because it doesn’t exist in one place. It exists everyplace.
Post-Money
Many businesses are beginning to understand the benefits of a “post-money” economy, or global economy in which paper currency backed by governments isn’t as important as virtual Bitcoin recognized and respected by everybody, regardless of where they live or do business.
That’s why you are starting to see more “Bitcoin” kiosks in grocery stores and “Bitcoin Accepted Here” signs at the entrances to small businesses.
Even Wal-Mart, the world’s largest retailer, recently announced a pilot program to use blockchain to track a segment of its produce business in the US along with pork shipments in China.
And if Wal-Mart starts to rely on blockchain technology, you can be sure other businesses won’t be far behind.