Bitcoin & Blockchain – What are they and why are they important?

Posted on January 18, 2018

While most people have heard of bitcoin (the electronic cryptocurrency), fewer have heard of its underlying technology – Blockchain. Blockchain is an electronic ledger for recording, confirming and totaling economic transactions. It’s a record of events that is shared between many parties. More importantly, once information is entered, this ledger can be shared among multiple users to create an unchangeable and time stamped record – or block – of their transaction, with each block linked to the previous one.

Blockchain was initially developed to tackle perceived shortcomings in the traditional banking system that created delays and complexity in how banks verified cross-border payments.  

Blockchain offers a number of key advantages including:

  • Transparency because it is open source technology
  • Reduced transaction costs due to the elimination of third party “middlemen”
  • Faster transaction settlements by eliminating delays in processing time
  • Decentralization of data from digital ledgers from a single data hub (physical location) to computer hard drives and servers spread across the globe.

 

Conversely, the most obvious risk tied to Blockchain is the same risk that all new, technologies and innovations face, the speed with which it is adopted into the mainstream market.  This is the same adoption challenge we’ve seen many well-known technologies face, from internet-based business-to-business commerce and broadband mobile to 3D printing and electric vehicles.

 

According to CoinMarketCap.com, as of the end of 2017, there were over 1,300 different virtual currencies available to investors.  In addition to bitcoin, Ethereum and Ripple offer digital currency services.

 

The use of Cryptocurrency and Blockchain has grown rapidly across many industries  as a better alternative to the traditional banking system.  Leading technology companies like IBM and SAP, along with major consulting firms Deloitte and Accenture are all investing significantly in Blockchain.

 

IBM and Maersk are developing a Blockchain-based solution for the ocean shipping industry which needs a way to manage and track tens of millions of shipping containers across the globe.

 

MasterCard is launching its own Blockchain-based payments network to allow partner-banks and merchants to make cross-border payments faster and more securely. Blockchain technology is also being leveraged in areas such as supply chain management, insurance, analytics, modeling, and  the Internet of Things (IoT).

 

Another key benefit of Blockchain currently being leveraged is its ability to transmit encrypted data. An example of this is the capability for healthcare providers who  need to transfer and share patient health records. Having an open Blockchain-based solution for medical data would tackle the existing problem of different providers having proprietary systems and databases.  Blockchain would make patient health information more readily available, resulting in better and faster treatment.

 

As Blockchain becomes more prevalent, it will have a big impact on talent acquisition. It’s the foundation and future of cloud storage, big data and artificial intelligence. The potential of Blockchain could be equated to the internet revolution of the mid-90’s.  As with many new  technologies, it will create new jobs and demand for top talent while eliminating others tied to legacy systems and archaic approaches to solving these types of problems.  

 

According to Computer World, in the last quarter of 2017, Blockchain developers ranked second only to robotics among the top 20 fastest-growing job skills.  Blockchain technologists are commanding a much as $150 per hour for their services according to Upwork, an employment site that specializes in freelance workers.  A recent report by Burning Glass Technologies indicates that the median salary for Blockchain developers in the U.S. is $130,000 compared to $105,000 for general software developers.  In high-tech regions of the U.S. such as Boston, New York City and Silicon Valley, the median salary is $158,000 compared to $140,000 for general developers in those regions.

 

Going forward, several keys to success will be fundamentally important for companies hiring Blockchain-based talent and the technology and engineering workforce/staffing solution providers who deliver talent to them.  These include corporate training and professional development; undergraduate and graduate level education; cultivation of talent-based virtual communities and standardization and further development of open source-based development.   

 

Blockchain is an explosive and exciting technology that will have broad and profound impact in many industries and businesses across the world.  It will also create powerful career opportunities in new and exciting technology and application areas for many years to come.