Blockchain is a revolutionary technology. It is simply a data structure where each block is linked to another block in a time-stamped. chronological order. It is the underlying infrastructure for bitcoin, a popular cryptocurrency. In near future, many companies will be adopting blockchain technologies for various purposes. Apart from bitcoin, it can be used for a wide variety of applications such as tracking ownership, digital assets, physical assets, or voting rights. It can also store and run computer code called ‘smart contracts’. However, blockchain is still new and the communities are still exploring the best ways in which it can be used.
The blockchain revolution began with bitcoin, which used distributed ledger technology to foster trust in a currency and transaction mechanism not backed by any government or traditional institution. Visionary entrepreneurs and CIOs building and expanding digital businesses are keeping the flow of transformation going. Their goal is to reinvent the very nature of commercial activity by removing intermediaries and enabling more-fluid business processes to be conducted in diverse ecosystems.
What is Blockchain Technology?
Blockchain is the digital ledger of economic transactions worldwide.It is the world’s leading platform for digital assets.
A blockchain operates within a decentralized network of users that constructs a globally secure consensus ledger
Anyone can access the blockchain's record and audit the activity of its network
The blockchain is comprised of blocks of the network users' activity or transactions, each block is chained to it's parent's ID (cryptographic Hash), so the longer the grows, so grows the truth.
Blockchain technology is the foundation for Bitcoin. However if the blockchain were the island of Manhattan, Bitcoin would be but one building on it...there can be so much more
Why Blockchain?
The Blockchain is a foundational technology, like TCP/IP, which enables the Internet. And much like the Internet in the late 1990s, we don’t know exactly how the Blockchain will evolve, but evolve it will.
Similar to the Internet, the Blockchain must also be allowed to grow unencumbered. This will require careful handling that recognizes the difference between the platform and the applications that run on it. TCP/IP empowers numerous financial applications that are regulated, but TCP/IP is not regulated as a financial instrument. The Blockchain should receive similar consideration. While the predominant use case for the Blockchain today is bitcoin currency exchange that may require regulation, this will change over time.
Had we over-regulated the Internet early on, we would have missed out on many innovations that we can’t imagine living without today. The same is true for the Blockchain. Disruptive technologies rarely fit neatly into existing regulatory considerations, but rigid regulatory frameworks have repeatedly stifled innovation. It’s likely that innovations in the Blockchain will outpace policy, let’s not slow it down.
Sima BAKTAŞ - Attorney at Law
sima@globalblaw.com