The author of The Business Blockchain, William Mougayar, explains in this article why the blockchain can be better understood when compared to document creation and linking programs.
The more people understand blockchain technology, the more likely it will be to expand application possibilities. As with any other new technology, the inventors have by no means thought through all possible applications. Accordingly, I believe it is important to increase the number of entrepreneurs and experts to create new use cases.
In order for this project to be realized, a basic understanding of the extent to which blockchain technology differs from other current technologies must first be created.
Even the most promising startup needs to understand the changes in the behavior and thinking of its users (e.g. Facebook understood the concept of sharing), just as large companies need to prepare for different management challenges to tackle blockchain projects.
The new Bitcoin code database
The idea that the Bitcoin code blockchain is only a modified database has been very popular in the past. In reality, it is not the Bitcoin code themselves that are disruptively addressed, but the way they are synchronized with each other.
Imagine two units (e.g. in a bank) that have to update their own accounts in order to make a money transfer from customer A to customer B. This process is very time consuming and costly, as a high level of coordination is required for synchronization and for sending and checking.
In principle, the money amount for a transfer is kept by the intermediary (in the case of the bank) until a confirmation of receipt has been received from the recipient.
The blockchain avoids this effort, since there is only one account book to which both parties have the same access. This fact simplifies the coordination and confirmation of transactions because there can only be one version at a time and not two different ones.
Exactly this logic should now serve as an analogy for the sharing of documents. Consequently, one should think about what happens when documents are shared by two or more users in order to make changes.
Google Docs and Bitcoin code
The classic way to share documents is to send a Microsoft Word file with a request to the recipient to make appropriate revisions. The difficulty with this scenario is that you have to wait until a Bitcoin code copy has been returned to view the comments or changes and intervene yourself if necessary. As long as the other person edits the Bitcoin code document, you cannot continue working on the file.
This is the current state of databases, two users cannot upload something at the same time. Banks also work according to this principle when it comes to transactions. They must temporarily block access (or reduce the account balance) while performing a transaction, then update the other side of the account and then re-enable access.
With Google Docs (or Google Sheets), both parties have access to the same document at the same time and can always view the latest version of the document. Similar to a shared account book, but with the difference that it is a shared document. The challenge of distribution always comes into play when several people are involved – just think of the enormous number of legal or public documents.
Instead of sending documents back and forth and losing track of their path, why not share all business documents instead of sending them? Many different types of contracts would be ideal for this workflow.
Although it does not require a blockchain to share documents, it is a helpful analogy.