Although most people have just started learning about the “blockchain” because of Bitcoin, its roots – and applications – go much deeper than that.
Blockchain is a technology unto itself. It enables Bitcoin and is basically the reason why * so many * new ICOs have flooded the market – creating an “ICO” is ridiculously simple (no barriers to entry).
The point of the system is to create a decentralized database – which basically means that a network of computers (generally managed by individual people), instead of relying on data like “Google” or “Microsoft” to store data in the same way as a larger company.
To understand the implications of this (and thus where technology can take the industry) – you need to look at how the system works at a fundamental level.
Created in 2008 (a year before Bitcoin), it is an open source software solution. This means that anyone can download its source code. However, it must be noted that the central “repository” can only be modified by certain individuals (so “code development” is basically not free).
The system works with what is known as the merkle tree – a type of data chart created to provide versatile access to data to computer systems.
Merkle trees have been used with great effect in a number of other systems; mostly “GIT” (source code management software). Without excessive technique, it basically stores a “version” of a data string. This version is numbered and can therefore be loaded every time a user wants to recall an older version. In the case of software development, this means that the source code set can be updated across multiple systems.
The way it works – and that is saving a large “file” with central data set updates – is basically what runs it like “Bitcoin” and all other “crypto” systems. The term “crypto” simply means “cryptographic”, which is a technical term for “encryption”.
Regardless of its core performance, the true benefit of wider adoption “on the chain” is almost certainly the “paradigm” it provides to the industry.
The idea called “Industry 4.0” has been floating for decades. The idea is often linked to the “Internet of Things” that a new layer of “autonomous” machines could be introduced to create even more efficient production, distribution, and delivery techniques for businesses and consumers. Although this is often objected to, it has never actually been adopted.
Many experts now see technology as a way to facilitate that change. The reason is that the interesting thing about “crypto” is that – as people like Ethereum especially prove – the various systems built on it can actually be programmed to work with a layer of logic.
This logic is really what IoT / Industry 4.0 has missed so far – and why many are looking at the “blockchain” (or equivalent) to provide a basic standard for new ideas going forward. This standard will give companies the ability to create “decentralized” applications that allow intelligent machines to create more flexible and efficient manufacturing processes.