What’s this blockchain and bitcoin stuff you keep hearing about? Bitcoin is not the same as blockchain but it is an application that uses blockchain technology in much the same way that email is an application that’s used on the Internet.
Sheila Warren, head of blockchain and distributed ledger technology for the World Economic Forum (WEF), and Marnie Webb, CEO of Caravan Studios, tried to explain the basics of blockchain and during “Blockchain For Nonprofits: Fact vs. Fiction” (#18NTCblockchain), a session at NTEN’s annual Nonprofit Technology Conference this past spring in New Orleans, La.
Blockchain is a digital ledger in which transactions made in Bitcoin, or another cryptocurrency, are recorded chronologically and publicly. All parties must agree for the transaction to occur.
“I don’t necessarily have to know who all of you are. I only have to know that we all agree,” Warren said. “We pay an enormous premium for trust. Blockchain has the potential to significantly reduce that cost.”
- Blockchain enables the decentralization and secure storage and transfer of information and the two identified five advantages to the technology:
- Distributed database
- Peer-to-peer transmission
- Transparency with pseudonymity
- Irreversibility of records
- Computational logic
Blockchain can track products through a supply chain, ensuring that furniture that’s claimed to be sustainably logged actually is, for instance. “I buy organic food all the time,” Webb said. “I’m just trusting that’s actually what it says it is,” she said. Blockchain technology can track that at every step in the process. Use of blockchain apps also can allow migrant workers to report workplace issues anonymously.
It can also track from where all of the currency, crypto and dollars, is coming.