EXPLAINED: BLOCKCHAIN

There’s a new buzzword sweeping the world of financial transactions: blockchain. Pioneered by bitcoin, the virtual currency, this new financial model has potential uses that extend far beyond digital currencies.

At present, the most common model for financial transactions is still using a trusted institution such as a bank. Blockchain, however, allows customers and vendors to connect directly, eliminating the need for a third party to complete the transaction. Through the use of cryptography that keeps exchanges secure, blockchain establishes a “digital ledger,” a decentralized database of transactions that everyone on the network can see. This network is essentially a chain of computers that must all approve an exchange before it can be verified and recorded. The beauty of blockchain is that it works for almost any type of transaction that involves a value, such as money, goods and property. This opens up the potential for myriad uses – potentially including logistics.

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