We’re Breaking Down Blockchain — Here’s What You Need To Know

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When an international conglomerate says it would like to turn one of your state’s quiet suburbs into a world capitol of blockchain, you’re going to have some questions.

Like, who is this company? Why are they coming to West Hartford, Conn.? And of course, what is blockchain — other than a headache, a 2018 buzzword for the techie set?

To some, blockchain is the super-smart computer technology that allows them to trade Bitcoin and other digital tokens online. To others, it’s a futuristic way to track shipments of goods from the warehouse to your doorstep. Still others envision blockchain powering all transactions one day, from shared cars to real estate deals to insurance claims.

One company banking on the rise of blockchain for business, Seven Stars Cloud Group Inc., hopes to make West Hartford its international headquarters for financial technology and innovation.

The company expects to attract more than 50 companies to its new Fintech Village, and bring at least 330 workers to the hub over five years.

If you want to hold your own with them at happy hour, here’s everything you need to know:

What Is Blockchain, Actually?

Think of blockchain software as high-tech accounting, and a single blockchain as a ledger, or chronological log of transactions, that’s resistant to hacking because it is decentralized. No one central authority owns or controls the information on it. Instead, the blockchain exists across a network of users and devices.

And while blockchain offers users privacy by strongly concealing their identities, the technology also creates transparency by making all transactions and holdings public to viewing.

Some people refer to them as trust tools because blockchain-based agreements, called smart contracts, are designed to remove risk. There’s no need for third-party agents when exchanging and tracking money, commodities and services, because specific terms of accountability are encoded in the blockchain.

Is Blockchain Only For Bitcoin?

Blockchain was first used to power Bitcoin, the first digital currency, or cryptocurrency. In the last few years, though, experts have pushed the bounds of blockchain to find uses outside of these digital tokens.

It can also be used to track digital assets — real commodities turned digital so they can be traded on a market. Sometimes these are referred to as tokens, but they are still backed by a physical asset with real-world value, like oil. energy, or real estate.

Blockchain can also be used to track other transactions and movements online. This is where many companies see the promise of the technology.

Is It A Big Deal?

Last year, the global market for blockchain technology was worth $0.71 billion, according to the Market Reports center.

By 2024, it’s expected to surpass $60 billion.

And much of the explosion of blockchain has begun in the past year.

The Wall Street Journal recently named five blockchain companies to its annual list of 25 “Tech Companies to Watch” in 2018. No blockchain companies made the cut last year.

Experts say blockchain has the potential to revolutionize how people do business and keep records. It can make contracts binding and investments more transparent. It can track the journey of a crate of tomatoes from farm to table. It can even make the mortgage market less risky because blockchain’s transparency would keep risky home loans from being bundled and repackaged as safer investments than they are.

Some experts say blockchain will be the next technological advancement of our time, changing the digital landscape like the Internet before it, and the barcode, ATM and credit card before that.

Do Companies Already Use Blockchain?

In July, Forbes released a list of the 50 biggest public companies exploring blockchain tech. Some were tech development giants like Alphabet, Apple, IBM, Intel, and Microsoft, but others are working to develop blockchain platforms in-house to suit their own business needs.

The list is heavy on financial and insurance companies such as Bank of America, Berkshire Hathaway, Goldman Sachs, JPMorgan Chase, MetLife and Wells Fargo.

But other industries are breaking in. In May, automakers BMW, GM, Ford and Renault founded the Mobility Open Blockchain Initiative to use the technology to make transportation safer, more affordable and more accessible.

Several companies hope blockchain will make ride-sharing, and even shared car ownership, more secure.

Others, like Mercedes-Benz maker Daimler, are testing their own cryptocurrencies.

Meanwhile, Nestle, Anheuser-Busch and Alibaba, a massive ecommerce company in China, are all working on using blockchain in the supply chain of goods, while Siemens, in Germany, is investing in a platform where neighbors can buy and sell solar power directly.

The list goes on and on.

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