How the blockchain is going to impact your credit union

I hate when people tell me I have to read something which is why I’m going to tell you that you should all read this April 2018 issue of MIT’s Technology Review dedicated to explaining blockchain technology. The issue provides a primer which explains what the blockchain is and how it is going to change everything; maybe not today, maybe not tomorrow but someday and for the rest of your life.

First of all, what is the blockchain? With apologies to IT professionals and people actually know what they’re talking about, the blockchain is a decentralized electronic ledger; whereas a traditional ledger is maintained by each individual bookkeeper, any party with access to computer network can potentially participate in the blockchain. Only transactions which comply with computer generated criteria can be added to this electronic ledger. It’s considered tamper proof because of the amount of computer power that would have to be used to solve every problem recorded on the ledger. Time will tell if this ends up being true.

Here’s the part where it gets real interesting. As explained in the lead article to the issue, since this electronic ledger is controlled by multiple parties that “instead of being managed by a single centralizedinstitution, such as a bank or government agency, it is stored in multiple copies on multiple independent computers within a decentralized network. No single entity controls the ledger. Any of the computers on the network can make a change to the ledger, but only by following rules dictated by a “consensus protocol,” a mathematical algorithm that requires a majority of the other computers on the network to agree with the change.”

 

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