Whilst most people only started to learn about “blockchain” because of The history of Bitcoin and the uses for it are much more complex.

Blockchain is a unique type of technology. It powers Bitcoin, and is essentially the reason why *so many* new ICO’s have flooded the market – creating an “ICO” is ridiculously easy (no barriers to entry).

The point of the system is to create a decentralized database – which essentially means that rather than relying on the likes of “Google” or “Microsoft” to store data, a network of computers (generally operated by individual people) are able to act in the same way as a larger company.

You must look at the system’s basic operation in order to comprehend the implications of this (and, consequently, where the technology may lead industry).

It is an open source software solution that was developed in 2008, one year prior to Bitcoin. This implies that anyone can download and edit its source code. However, it must be noted that the central “repository” can only be changed by particular individuals (so the “development” of the code is not a free for all basically).

In order to give computer systems access to versioned data, the merkle tree, a type of data graph, was developed. This is how the system operates.

Merkle trees have been used to great effect in a number of other systems; most notably “GIT” (source code management software). Without getting too technical, it basically stores a “version” of a set of data. Since it has a version number, the previous version can always be recalled by loading this current one. It denotes the ability to update a set of source code across various systems in the context of software development.

The way it works – which is to store a huge “file” with updates of a central data set – is basically what powers the likes of “Bitcoin” and all the other “crypto” systems. The term “crypto” simply means “cryptographic”, which is the technical term for “encryption”.

Irrespective of its core workings, the true benefit of wider “on-chain” adoption is almost certainly the “paradigm” that it provides to industry.

There’s been an idea called “Industry 4.0” floating around for several decades. Often conflated with “Internet of Things”, the idea is that a new layer of “autonomous” machinery could be introduced to create even more effective manufacturing, distribution and delivery techniques for businesses & consumers. Although this has been referenced frequently, it has never actually been implemented.

Many commentators are now considering technology as a means of facilitating this change. Reason being that the interesting thing about “crypto” is that – as especially evidenced by the likes of The various systems that are built on top of Ethereum can actually be programmed to function with a layer of logic.

This logic is really what IoT / Industry 4.0 has missed thus far – and why many are looking at “blockchain” (or an equivalent) to provide a base-level standard for the new ideas moving forward. This standard will provide companies with the ability to create “decentralized” applications that empower intelligent machinery to create more flexible and effective manufacturing processes.