Blockchain as a technology is making headways worldwide. Both in terms of its popularity and practical applicability. Despite that, popular understanding of this new technology is rather poor.
The word "blockchain" is used most often in the context of Bitcoin and other cryptocurrencies. This is because cryptocurrencies were the first way that blockchain was ever utilized.
Blockchain, meanwhile, is simply a database. What distinguishes it from the crowd of other databases, however, are its decentralization and unchangeability. What does that mean in practice? It means that information held on the blockchain cannot be changed. Now, any number of people can have a copy of said database who then collectively guard its records.
How does it work?
To more easily explain how blockchain works, we will use a short, illustrative story. Imagine that you just met a new person who wants to sell you a book for $10. You decide to buy and, to stay safe, you both record the transaction on pieces on paper. Both of you now hold a receipt for the transaction. Everything works out great. Now, however, you yourself have another book that you wish to sell. The new friend of yours wants to buy it from you and this leads to a new transaction. You sell the book to your friend for $5. and, again, everything is recorded on your respective pieces of paper.
At some point, a new person comes along and wants to join in your book-trading club. You have nothing against it on one condition--that the new person will copy your records of prior transactions onto their own piece of paper lending them additional credibility and security. Following the addition of a new member, the whole group proceeds accordingly with any new transaction and thus everybody holds proof of every past transaction.
This is exactly how a blockchain comes into being. It is an infinitely bigger version of the above situation with the two friends and a trusted third party. On the blockchain, however, the whole community is the trusted third party and not one person.
What does the world need blockchain for?
Although, as has already been mentioned, cryptocurrencies are the best known form of practically utilizing blockchain, the system described above can be used in multiple sectors of the economy. Blockchain could be used to facilitate voting for political parties and the results would be recorded on the blockchain. The real estate market could benefit from faster and cheaper transactions. The automotive sector even today is using technologies similar to blockchain to record various self-driving vehicles' performance and compare the results of analyses. Blockchain also has a role to play in the area of copyrights in the music industry.
The above examples are, however, only the beginning. We have barely seen the incipient 90s-like monetary version of the Internet with Bitcoin and blockchain. The technology does, however, represent a great investment opportunity since whoever invests in new technologies the soonest, benefits the most in the long run.
Blockchain and the law
Currently, Poland does not have any regulation comparable to An Act Related to Blockchain Business Development enacted in the state of Vermont in the USA. There is language speaking of a decentralized database, however, in the draft Simple Joint-Stock Company bill in Poland. On the European level, there was also the European Parliament resolution of 3 October 2018 on distributed ledger technologies and blockchains: building trust with disintermediation (2017/2772(RSP)) shedding some light on the EU's view of the blockchain technology. So far, however, neither Poland nor Europe has had a strictly blockchain-based bill introduced in either parliament.
Copyright © 2019 Polish Blockchain and New Technology Chamber of Commerce
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