Never heard of “blockchain” technology? Well then you better start Googling it, because like the fax machine, personal computer and the Internet, blockchain data authentication, storage and sharing technology promises to change the way financial transactions occur in a transformational way. Along the way the way banks make loans, and the way we access public data (including property title information) could be radically changed, many say for the better.
A blockchain facilitates secure online transactions. It refers to a decentralized and distributed digital ledger that records transactions across many computers in such a way that the registered transactions cannot be altered retroactively. Data can be distributed but not copied, can be shared but not stolen, can be personal but because any confidential data will be registered in a unique code to you. This code or “keys” as referred to in blockchain lingo, consists of a long, randomly-generated string of numbers and characters that one day you may carry with you in an Orwellian manner so that you can unlock all of your own personal information in this database structure. (“Hi there, I am number 679K0iYZX56!34721#, what is your code?”)
Information held on a blockchain exists as a shared and continually reconciled database over a global network of computers that makes it nearly impossible to be corrupted and hacked.. Data is not stored in any single location, meaning the records it keeps are truly public and easily verifiable. Hosted by millions of computers simultaneously, its data is accessible to anyone on the internet.
There has been some talk about how blockchain technology could prevent financial fraud, reducing that risk for lenders, and also to manage public property records. This latter idea could radically alter the title industry by eliminating the need for a “middle man” to verify authenticated property information and thereby making that information available to everyone using a simple blockchain data search tool.
In May 2016, Forbes Magazine published an article titled “How Blockchain Technology Could Change the World.” Author Bernard Marr wrote “We have become used to sharing information through a decentralized online platform (the internet). But when it comes to transferring value – for example money – we are usually forced to fall back on old fashioned, centralized financial establishments such as banks. Even online payment methods [such as} Paypal… generally require integration with a bank account or credit card to be useful. Blockchain technology [could] eliminate this [need] by filling three important roles – recording transactions, establishing identity and establishing contracts – traditionally carried out by the financial services sector.”
A September 2015 World Economic Forum report predicted that by 2025 10% of GDP will be stored on blockchain technology. That is twenty billion ($20B) reasons to pay attention.