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Blockchain is the technology that’s enabled the virtual currency called Bitcoin. Using blockchain it’s possible to exchange and record digital messages in a way that the integrity of the information can be maintained and unaltered without requiring a trusted centralized third-party, like a bank, to guarantee the authenticity of the information. All transactions of blockchain are open to the public for verification. Proponents of blockchain have described it as “transfer of trust in a trustless world“.
Jeff Garzik, one of the maintainers ob bitcoin, described the blockchain as “register of deeds… I don’t store bitcoins, I store private keys that show I own bitcoins. I don’t actually send bitcoins, I just change the name on the deed.”
Charles Moldow, general partner at Foundation Capital, said that “we think one of the most promising areas in Bitcoin is in the blockchain technology layer. It’s where the greatest innovation is happening…”
Other uses of blockchain technology than for cyber currencies like bitcoin, are ‘smart contracts’ where the blockchain is used as the record of authenticity. Houman B. Shadab, co-director of New York Law School’s Center for Business and Financial Law, said that “The potential to greatly reduce or even eliminate the need for litigation and courts may be the most attractive feature of smart contracts… in principle removes the potential for parties to have a dispute.”
IBM has created a proof of concept, developed in partnership with Samsung, that uses a blockchain to create a decentralized network of devices. IBM’s ADEPT paper describes the technology, saying that “applying the blockchain concept to the world of (Internet of Things) offers fascinating possibilities. Right from the time a product completes final assembly, it can be registered by the manufacturer into a universal blockchain representing its beginning of life. Once sold, a dealer or end customer can register it to a regional blockchain.”