Blockchain Technology Basics
Technology plays a critical role in innovation. We take a brief dive into some of the concepts behind blockchain technology.
Technology plays a critical role in innovation. We take a brief dive into some of the concepts behind blockchain technology.
We’ll start our analysis by attempting to understand the market we’re looking to invest in. I call it The Game Being Played.
Like any other opportunity, blockchain is an investing universe with its own rules and ideas. There’s things which ‘just make sense’ in the context of blockchain, and there’s other things which ‘just don’t work’.
To help explain some of the larger concepts in this unique an exciting investing universe, I’ve broken the analysis of The Game Being Played into four components, spread across two articles. The four components are:
Quick Note. This information should not be considered investing recommendations or investment advice. It is simply a mental model which I’ve used in my own life and desire to share with others. Consider your own circumstances and do your own research :)
What is blockchain?
If you find yourself asking this question, great work! You’re on the right path, and you’re definitely in the right place.
In its simplest form, a blockchain can be considered as a distributed database that stores data in blocks which are linked together via cryptography. New data is stored in a block, which is then chained to the rest of the blockchain in sequential order. Hence the term ‘blockchain’.
However, to understand The Game Being Played, there’s a little more nuance to this definition. We need to understand these things:
Right now you might be asking yourself: So what?
Why is an immutable, distributed, decentralised and transparent way of storing data important? What is the big fuss about, and more importantly, why is there so much money flowing into it?
You’ve just asked another great question about The Game Being Played.
Here’s a few ideas to bounce around in your mind:
Pause for a moment to think about what it would mean if you could securely transact with someone you’ve never met, on the other side of the world, without:
And where:
That’s the kind of promise of blockchain.
Right about now your eyes might be starting to glaze over. You’re thinking to yourself, “I read this article to learn about how to analyse the market, not all these weird terms!”
You’d be right. We’re here to develop a framework for investing, not ‘nerd out’ about blockchain.
Bear with me while I quickly outline a couple of terms I use in the rest of this series of articles. Then we’ll get into more of the investment opportunity.
Alrighty. Enough of the technology. Let’s start talking about the opportunity!
For the more technical readers out there, this was only a very brief introduction to the technology and skipped over a ton of information. If you’re interested, get in touch and I can recommend some more reading.
The next stop in The Game Being Played is to explore some of the opportunities blockchain proposes to offer us.
As always, if you’re enjoying this series, take time to interact. Comments, claps, tweet mentions, LinkedIn mentions and sharing is a great way to interact with a community of people who can add to our exploration. A great way to stay up to date with this series as it comes out is by following me or signing up to our email distribution. A word of caution though — please keep it respectful, fun and polite. We want a safe place to learn and grow ❤
Articles in the Series so Far: