What All New Kids on the Blockchain Need to Know

Blockchain – it’s been the tech buzzword of the year. After Bitcoin captured the world’s imagination, causing serious consternation to national governments and multinational banks alike, interest quickly turned to the underlying idea – Distributed Ledger Technology (DLT) or Blockchain. And like every new disruptive industry, it didn’t take long for the enfant terrible to go legit.

Even if most people initially had only a sketchy understanding of issues such as double spending or the Byzantine Generals’ problem, the idea of a decentralized currency based on a publicly accessible record appealed to everyone from the social justice warriors occupying Wall Street to the new wave of P2P entrepreneurs building the Sharing Economy.

But of course, the big boys were always going to get in on the act, and by Q1 2016, the total amount of venture capital invested in start-ups based around bitcoin or blockchainhad hit $1.1bn. The number of blue-chip financial institutions making investments is growing exponentially, and the sector is being discussed as a revolution on a par with the rise of the internet itself.

But how much of a game-changer is blockchain? How long will it take to transform the way we do business? And how can the next generation of tech titans carve out their fortunes?

We spoke with Haim Toledano, one of Israel’s most prominent and successful tech investors, to get his prognosis, asking him first where he expects to see the most action in the next few years.

“The blockchainareas that are going to generate the most heat include Cloud Storage, Identity Security and Smart Contracts,” he explained. “When even the biggest global organisations are vulnerable to hacking attacks – and barely a day goes by without another example in the news – it’s only natural that people are going to look for multiple, less prominent places to store their data. With identity theft a constant source of anxiety, digital signatures based on public key cryptography, where only the correct private key can trigger the transaction, seems like a no-brainer. As for contracts – whether we’re talking business deals or interpersonal contracts, when you eliminate the need to trust a third party intermediary, you’re going to see much faster, smoother processes across the board.”

But are we looking at a sudden, violent revolution – or a slow and steady march through the institutions?

“Some very well-respected people have predicted radical change within a couple of years. Others are more cautious, and reckon on a 10-year timeframe before blockchain becomes an integral part of the online ecosystem. I think we’ll see some big waves in the three sectors I mentioned over the next 3-5 years – after that, the pace should pick up,” Toledano said.

Image source: https://s3.amazonaws.com/main-newsbtc-images/2014/04/Blockchain-info-Logo2-825×510.jpg