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How Will Blockchain Change Business Essay

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Blockchain A number of articles have discussed the potential use of blockchain technology outside of the financial realm. Within the financial realm, blockchain is used for cryptocurrencies. The technology is based using peer-to-peer networks to store ledgers of transactions. Proponents of the technology argue that it can be used for other transactions, and that business should be excited about exploring such potential uses (Church, 2017).

There are a couple of interesting things about the claims surrounding blockchain technology. The first is the claim that blockchain technology is incorruptible. The idea is that because each transaction is verified by multiple different parties, there are multiple records of the transaction, so it is difficult to dispute. Now, the problem that will occur is when one of the members of the blockchain doesn't agree – that there are different sets of data and they are in conflict with one another. Just because blockchain hasn't been corrupted does not mean that it is incorruptible. The reality is that blockchain is essentially lawless, and a source of wealth, which makes it ripe for exploitation. Attempts to commit fraud via blockchain systems will occur.

Another interesting aspect is the idea that blockchain is more efficient, as a means of...

Instead of two people agreeing on a deal, more than two people need to agree on the deal, which makes it inherently less efficient than the equivalent two-party transaction also conducted online. One argument holds that blockchain has value because it cuts out the middleman from transactions, such as international remittances. But asking multiple nodes to confirm a transaction is adding middlemen. This threat might make traditional middlemen obsolete, yes, or it might just make them learn how to be more efficient.
The literature on blockchain all says the same thing, but without supporting the arguments with evidence. If adding additional nodes to a transaction makes something more efficient, business will want to actually see evidence of that, before adopting it. This is not to speak of the wasteful, inefficient process of Bitcoin mining, which leaves a carbon footprint the airline industry would be jealous of. That is a massive externality not priced into any blockgeek's evaluation of the technology's merits. Computational power isn't free, and right now it's not being priced into blockchain transactions, which makes them seem a lot more efficient than they actually are.

There is another issue as well that pertains to the adoption of blockchain…

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References

Blockgeeks (2017) What is blockchain technology? A step-by-step guide for beginners. BlockGeeks. Retrieved December 9, 2017 from https://blockgeeks.com/guides/what-is-blockchain-technology/

Church, Z. (2017). Blockchain, explained. MIT Sloan Management School. Retrieved December 9, 2017 from http://mitsloan.mit.edu/newsroom/articles/blockchain-explained/


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