A background on blockchain

Blockchain, the engine that runs Bitcoin, originated in 1991 and was then described as a “cryptographically secured chain of blocks” by Stuart Haber and W. Scott Stornetta.

Within the technological pipeline, the application of blockchain developed its potential into financial and inter organisational transactions. The second generation of blockchain excited markets with upgrades in cryptocurrency and Bitcoin.

Bitcoin was developed by Satoshi Nakamoto in 2009 and although it was not the first online currency to appear, it is Nakamoto's design which dominates the technology today.

Bitcoin was introduced to the world in the now famous Bitcoin white paper; an academically constructed article proposing bitcoin as a novel system for electronic transactions. Nakamoto stated the necessity of Bitcoin as a medium of peer-to-peer transactions which “would allow online payments to be sent directly from one party to another without going through a financial institution”. The omission of a third-party ledger leaves many benefits for this technology, primarily autonomy and control between peers.

In theory, blockchain boasts several advantages. It utilises a carefully constructed database; transactions are recorded and cannot be later modified. This encourages reliability and transparency for the technology. In practice, corporate services had initially adopted this technology to prevent double spending with third parties.

Blockchain’s quick responsiveness creates a competitive advantage to these sectors as an efficient means to carry out transactions across global networks. The production of high quality contracts between corporate peers is a quick sell to align with today’s modern economy.

However, it is worth noting that this technology is not without limitations. Blockchain requires high energy consumption to run its engine and record transactions. It is also notoriously costly; with high initial capital costs and costs attributed to its energy consumption. Blockchain has been under threat from several cyberattacks, including those attempting to crack its encryption methodology.

From a practical perspective, the employment of blockchain has led corporate markets to reduce personnel. This is due to less need for human intervention in transactions. The preceding caveats are important to consider for organisations interested in adopting the technology for their own project requirements.

The future of blockchain remains under discussion. There is less disagreement over whether the technology works, rather conversations presently surround its long-term utility for the global economy.

Blockchain has successfully expanded its financial roots into other industries. For example, the life sciences utilise the technology to support sensitive data transactions. This expansion attests to the adaptability of blockchain across sectors, simultaneously reiterating the need for critical evaluation over the use of the technology as it develops.

Albeit blockchain was originally developed to reduce human intervention, human collaboration is still required to support a growing platform.