There has been much excitement about the disruptive potential of blockchain technology, but there is also much confusion. Some people think blockchain is used only with Bitcoin and cryptocurrencies or that it’s only used to enable nefarious, anonymous online transactions. In reality, blockchain is one of several key technologies -- along with the internet of things (IoT), artificial intelligence and fog computing -- that are revolutionizing businesses and transforming entire industries. Together, these four technologies can drive new business models and deliver new value propositions while solving longstanding challenges with transparency and security in transactions that involve multiple parties and large amounts of data.

To understand the true potential for blockchain, we must first define the technology, then dispel some of the common myths and, lastly, examine some of its most exciting potential use cases.

What Is Blockchain?

Blockchain technology is a decentralized ledger that allows a shared set of computing systems to agree that a transaction between multiple parties is authentic. These outcomes are permanently recorded and consistently reconciled and updated in a cryptographically secure way. Because the ledger is distributed among all transaction participants, it exists simultaneously in multiple places, making it extremely difficult to manipulate entries or tamper with the data without the other parties noticing. Thus, what makes blockchain so important is its ability to automate trust and transparency among all parties using it.