Tech Memo: Blockchain Basics
Looking beyond bitcoin to practical applications for blockchain.
What can blockchain do for you? Associations should be asking this question to prepare for a future where business relies heavily on blockchain technology, which by some estimates will store approximately 10 percent of global GDP by 2025.
Blockchain has the potential to make transactions, with both customers and members, more seamless, transparent, and secure. But what exactly is it?
“A lot of people hear ‘blockchain’ and think cryptocurrency or bitcoin, but it’s actually not the same thing,” says Scott Greenwell, creative director for Unleashed Technologies. “Blockchain is not for nefarious purposes. It’s about creating an unhackable system of records.”
In a nutshell, blockchain technology tracks activities or records, referred to as blocks, which are then linked and secured using cryptography. Each block serves as a distributed ledger that can record transactions in a verified and permanent way. Using blockchain, confidential information—such as business transactions, medical records, or education credentials—can be accessed without compromising data or security protocols.
It’s difficult to envision all the ways in which blockchain could revolutionize how associations will store data and process transactions in the years to come, Greenwell says. We’re at a similar moment with blockchain as we were in 1995 with the birth of the internet: While we could conceptualize what the internet was, we did not fully understand how it would change our digital world.
To understand blockchain better, it helps to study up and begin talking with your members about potential use cases, says Chris Burruss, president of the Blockchain in Trucking Alliance. BiTA launched in August to develop blockchain standards, certification, and education for the trucking industry.
“Blockchain is a really specific technology, and to explore it, we all need to get on the same page,” Burruss says. “If it’s going to function, we can’t have people working on different platforms and in a different code.”
BiTA has more than 300 members from the trucking, technology, and shipping industries. This cross-industry collaboration is focusing on how to build a blockchain network that could speed up time-consuming logistical processes, such as contracting.
“What if by using blockchain we can develop what’s known as ‘smart contracts,’ which can help to automate how we do our shipping and transactions,” Burruss says. “Prior to now, [blockchain] was a space devoid of any leadership. We want to educate and build standards around practical use cases that seem to be on everybody’s mind.”
By gaining an understanding of what blockchain can potentially do, Burruss says, association leaders and their members will be able to begin to think critically about how it will affect the future of their industries.
“We’re still learning as we go,” he says. “But no matter your industry, you need to be thinking about your common issue areas and if blockchain can work to solve them.”