A Product Manager Explains Blockchain

What the hell is a 'blockchain'?

You've probably heard the term being thrown around on podcasts and articles, and maybe even on the job... and maybe you don't actually know what it is. Have no shame. Have no fear. I'm here to explain blockchain basics!

Blockchain is a really important technology to understand as a product manager, because as blockchain gains momentum, there is a huge product opportunity. Product managers will be needed to take this technology from something only engineers understand, and transform it into products that can be implemented to solve important use cases for business and government. Product managers have an important role to play in making the complexity of blockchain invisible for non-technical stakeholders.

Blockchain is something you should start understanding now as a product manager. 

I'll give you the basics and will also provide some links in case you'd like to learn more. 


Blockchain: A Definition in Less than 10 Words:

Blockchain is a secure, immutable ledger of asset transfer.
 
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BlockChain: A Simplified Visual that a Toddler Could (Maybe... Probably?) Understand

Full disclosure: I don't have any toddlers, so I don't actually know what they can and can't understand. I do think this definition is pretty simple, and I've actually paraphrased this from a definition given by Jamie Smith, Global Chief Communications Officer of BitFury, from her interview on the UnChained podcast.

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Think of the blockchain like a train track. There's a train car on top of the train track, and it's carrying a digital token. People can attach things to that digital token. In the case of BitCoin, which operates on blockchain, the digital token carries money. That token can then move along the train track to be transferred to another person, and the transaction is then documented by a 'global notary' - a distributed network that verifies the transaction. This 'distributed global notary' is the blockchain.

In the case of cryptocurrencies, the asset attached to the digital token is the currency. But it doesn't have to be money - it can be any asset.

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Blockchain Security: An Explanation

Everyone in the world is trying to figure out how to improve cybersecurity. How do we keep data secure? Blockchain solves for this. Let me explain how.

Note: I'm also paraphrasing this from Jamie Smith's fantastic explanation on the Unchained podcast, a podcast about blockchain. (Yes, this is a podcast I listen to for fun.)

A *lot* of the value of blockchain lies in the improved security.

In the 80s and 90s, the internet was created to move information, and this changed the world. That information had to be stored somewhere, and it was stored in silos. This is basically the way we still store data today. 

Blockchain is based on a concept of taking all that data and breaking it up into pieces so you can't just break into one house in a neighborhood, you have to break into every house in town. (Bear with me - keep reading and I'll make sense of this analogy, I promise!).

This distributed ledger is what makes blockchain so different than the cybersecurity situation we're in today.

Blockchain Security: A Visual

Imagine there's a one house in a neighborhood that holds all of the gold (data). If I'm a thief, I only have to rob this one, single house. This is the current situation.

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Blockchain is different - it's distributed. Going back to the 'robbing a house' scenario above, if you're a thief and you want that gold (data), you can't just rob a single house - you have to rob every house in the neighborhood.

To make it even more difficult, also imagine that there are new houses being built every 3 minutes in the neighborhood as you're already in the process of robbing houses. As a thief, it's impossible to even keep track of all those houses you have to rob, since new ones are popping up every 3 minutes, let alone possess the ability to rob them all in order to get that gold (data). 

Let's quickly relate this to recent cyber attacks on big American companies - the Target cybersecurity breach of December 2013, for example. Because all of Target's customer data is centralized (generally speaking), hackers only need to hack one point of entry to find a centralized gold mine of information. Now imagine how distributing this information would revolutionize cybersecurity.

Based on this description, hacking the blockchain may seem impossible. I don't know if this will always be true, but in the last 9 years since blockchain has been around, no one has been able to hack it. 

Blockchain: Product Applications

  • Digital Voting
    • Gone will be the days of voting fraud! As people cast votes, the blockchain will keep track of tallies of the votes. This way, everyone on the blockchain agrees on the final count because the count is distributed; everyone on the chain is auditing. Votes will not be able to be changed or removed.
       
  • Electronic Health Records
    • I dream of the day when I don't have to call 24 different doctors that I've seen in the past five years to get all of my medical records. Everyone hates doing this and it's a huge pain point in health management.

      Rather than having separate records among all your healthcare providers, your health data could be stored on the blockchain, owned by you, immutable, and accessible only to those that you allow. Your information would be all in one place, yet secured by blockchain.
       
  • Birth Certificates
    • Time stamp the birth of a child - it can never be changed. Birth records could not be altered on the blockchain
       
  • Land Registry
    • This would enable governments - even those with a reputation for being corrupt - to ensure the storage and register of land ownership - even in countries with frequent natural disasters. This would be particularly transformative in countries with a history of corruption.

These are only a few examples of practical applications. As a product manager, I'm sure you've already thought of several more by reading through this list.

Further Reading on Blockchain

If this article sparked an interest to read further about blockchain, I recommend the book BlockChain Revolution by Don Tapscott

Listening Party on Blockchain