Blockchain is really going to have a massive impact on the future of commerce. It can create a market out of anything and can bypass the bureaucratic difficulties that accompany transactions. There are many applications to this technology that will propel countless projects and ideas forward with unprecedented efficiency.
A lot of people struggle to understand blockchain, what it is, and why its useful. I find the easiest way to conceptualize it is as the basic transactions that take place every day minus the middle man.
The most basic example is purchasing an item. If someone has bitcoin and someone else accepts bitcoin, both parties can bypass the institutions that facilitate the transaction like a bank or even a store. However, given that stores help inform our decisions, this is not necessarily the most useful example.
A better example might be of a digital project someone wants built. Let’s say this project has many parts. Someone assumes the final product will be worth $1,000,000 and there are 1000 “blocks” that people can purchase. If people think the value of the final product will exceed $1,000,000, they will be willing to purchase a block for $1000. Additionally, if someone wants to complete 1/1000th of the project for $1000, they will also be able to do that. During this process, the value of each block may increase or decrease. If it increases, meaning people are beginning to think that the value of the final product will greatly exceed $1,000,000, the demand for the blocks will increase. This will increase the value of the individual blocks and increase the price at which completion of the product comes about. Because of smart contracts in which the computer assigns payouts, very little to no bureaucracy is needed for the large number of necessary transactions to take place.
This example illustrates the value of blockchain.