Blockchain Defined

Before we can understand blockchain, we have to understand some basic principals that have led to the development of blockchain.

Centralized DataComputer data is centrally stored on a server – somewhere. Yes, even the cloud is a series of servers…somewhere. And they can be hacked – even though there is encryption on the data. Ever get a notice from your medical group or a store that said that some of your private information may have been compromised? Central storage has some disadvantages.

Let’s start with some basics:

1. Computers work on “0s” and “1s” to communicate. However, the instruction that programmers give computers vary from application to application. Have you ever updated your computer operating system to the “latest version” only to find out some of your favorite programs no longer work? Frustrating.

Well, it is because the “latest version” did not communicate the same way that your older programs did. Like speaking English to someone who only speaks French. 

2. Computer software programming has been made simpler over the years by building programs on existing platforms.  Like starting a house construction on a preformed foundation. The basic platform for Microsoft PCs is vastly different from the platform for a Mac. Thus the need for different software packages.

3. Now, let’s carry that into the business world. Each company or service provider uses different software to carry out their business. But almost none of the software packages will talk to each other because they are built on different platforms using different computer construct languages.

4. Unless people in the business world use software built to be compatible with all the other software used in their industry, the chain of information will need to be entered in over and over, duplicating keystrokes and taking up needed time, which delays everything due to the human element.

Thus, the invention of Blockchain. Blockchain is a shared ledger (spreadsheet if you wish to imagine it) that will be able to be accessed securely between business components with expressed permissions. It will speed up tracking of assets, logistics, and information across many different types of businesses.

Here is an example to help it make sense.

Let us consider this example. If I were an importer and I wanted to import 2000 clothespins from Argentina.  Now with a blockchain software system, when I placed the order on the ledger, it would go from my computer to the manufacture who shared that ledger. Then when they ship it, they would add that information to the spreadsheet and the necessary information would be seen by the shipper, who also shared the ledger, and the logistics group, and customs, and back to me. All the information was entered on my side, with the exception of details which are added by the other interested parties.  All is contained on one platform and only the parties that are allowed access can see or add information.

This saves immense time and logistic headaches.  This is also great for so many other types of businesses. Not just ones that have a physical material to deal with, but ones such as the medical field, hospitality, travel, intellectual property, patents, copyrights, etc. In other words, any piece of information that needs to be secured and recorded for shared usage.

To fix the challenges that the world faces, with more and more transactions taking place day after day, there needs to be faster payment networks that provide methods to establish trust and require no specialized equipment. There must be transparency for all who use this and the ultimate protection against fraud and cyberattacks.

The shared ledgers as they are called are being developed by various software companies around the globe. When a business uses this new platform, the data stored in this ledger is sent in pieces around the world to be stored – therefore it is no longer in one, central location. The information cannot be accessed unless the party trying to access it has specific, certifiable permissions. 

Since the information is shared, by its very nature it is transparent and everyone involved is accountable for their actions within the ledger. Every time someone updates the ledger (or spreadsheet) the information is added for all to see.

What is imputed is converted into a unique hash, which is almost impossible to recognize or duplicate. Look at the difference when the only change is a capitalization of the first letter. The entire string in the hash is changed.

Once the information then is added to the block, the block is verified by thousands, perhaps millions of computers distributed around the net.

The verified block is added to a chain, which is stored across the net, creating not just a unique record, but a unique record with a unique history. It would be virtually impossible to falsify records because it would mean changing millions of records to do so. No fun for hackers, that is sure.

There are is a monetary advantage for companies because there are no transaction fees within the blockchain. Originally designed for Bitcoin, it has now grown far beyond and is making inroads into many industries. 

Blockchains will change the way stock exchanges work, loans are bundled, and insurances contracted.

The three reasons Blockchain information is growing:

  1. Decentralization of Information – the ledger information is not stored on any one server. Data is susceptible to cyberattacks if it sits on one central location.
  1. Transparency – Blockchain records all records and stores them over a large number of computers. However, personal information in the transactions is encrypted so that you might see that someone ordered one Bitcoin or container of garden hoses, but the name would look like a giant password. Algorithms at work! Only those companies with permissions may see who it was that actually ordered it.
  1. Immutability – This is like saying it is “set-in-stone” and cannot be meddled with or hacked. The security and encryption make the Blockchain impenetrable.

Now you can see why it was such a necessary development and why it has become the method used to secure the cryptocurrencies being used around the world.

Now having said all that, see the news article on DOJ cracking cryptocurrency being used by terrorist groups.

Our government has been looking at this technology for a few years now. The U.S. Federal Blockchain Forum was an inter-agency forum hosted at General Services Administration on July 18, 2017, for executives across the federal government to learn about advances in Blockchain technology, discuss use cases, and set an agenda for working together to evaluate and implement it among our diverse missions.

Forum Participants


Bureau of Fiscal Service

U.S. Agency-International Development

Center for Disease Control and Prevention

U.S. Army Research Lab

U.S. Census Bureau

Commodity Futures Trading Commission

U.S. Coast Guard

Congressional Research Service

USDA Food and Nutrition Service

Consumer Financial Protection Bureau

USDA Food Safety and Inspection Service

U.S. Department of Health and Human Services

Defense Finance and Accounting Services

U.S. Department of Homeland Security

Defense Information Systems Agency

U.S. Department of Housing and Urban Development

Department of Justice

U.S. Department of Labor

Export-Import Bank

U.S. Department of State

Federal Bureau of Investigation

U.S. Department of the Treasury

Federal Communications Commission

U.S. General Services Administration

Federal Deposit Insurance Corporation

U.S. House of Representatives

Financial Crimes Enforcement Network

U.S. Library of Congress

Institute of Museum and Library Services

U.S. National Archives and Records Administration

Internal Revenue Service

U.S. Office of Personnel Management

Manhattan – City of New York

U.S. Patent & Trademark Office

Millennium Challenge Corporation

U.S. President’s Emergency Plan for AIDS Relief

National Capital Planning Commission

U.S. Securities and Exchange Commission

National Defense University

U.S. Small Business Administration

National Geospatial-Intelligence Agency

U.S. Treasury Office of Financial Research

National Institute of Standards and Technology

Uniformed Services University of the Health Sciences

Office of the Coordinator for Cyber Issues

United States International Trade Commission

Office of the Coordinator for Health IT

US Department of the Treasury

Securities and Exchange Commission

USAID Global Development Lab

State Department Office of the US Global AIDS Coordinator

USDA Food and Nutrition Services

State Department Secretary’s Office of Global Partnerships

USDA Food Safety and Inspection Service

State of Illinois, Innovation & Technology

White House Office of Information and Regulatory Affairs

The Export-Import Bank of the United States

White House Office of Management and Budget

Transportation Security Administration

White House Office of the Federal Chief Information Officer

You can read all that was concluded from this particular forum at

There are many other reasons to understand this technology, but two are the most outstanding:

  1. Blockchain is the newly designed decentralized digital recording system that can be securely shared.
  2. Cryptocurrency utilizes this system to implement their digital currency.

Many new startup companies are popping up all over the world to provide Blockchain security services. This new and growing industry belongs in the near future as the best platform for business, finance, health,  government, and military to use.