Blockchain is the new black no, really.

• Author: Monterio, Brad J.
• Position: In Vogue

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Blockchain technology. distributed ledger, Bitcoin. Today you can barely read a financial, technology or capital markets story without coming across these topics. As governments, regulators, stock exchanges, banks, software vendors and corporations become increasingly involved in efforts to exploit the blockchain and distributed ledger technologies that underpin Bitcoin cryptocurrency, we're on the precipice of innovations and discoveries around how they will disrupt legacy business and capital markets models--as well as regulatory paradigms.

And there's even a potential role for XBRI--(Psst ... CPAs could be impacted by it as well.)

Technology advances at an exponential rate today, at times moving from one fad to the next (think self-driving cars)--not so with blockchain technology, according to industry and regulatory experts. If the level of recent investment in the blockchain ecosystem is any indicator, this game-changer is the new black, and a more solid foundation for even greater innovations and disruptions to come.

According to VentureSource and Crunchbase sources cited at an April event hosted by XBRL-US, more than 51 billion has been invested in the last four years by dozens of institutional and corporate investors in more than 80 blockchain deals. Much of this investment has been, predictably, in blockchain-related infrastructure to develop platforms, exchanges, tools and other resources that create the foundation for the future and look beyond being used in simple monetary transactions.

Decoding Blockchain and Distributed Ledger

So what is this phenomenon called blockchain in which investors are pouring rivers of capital? Is it the holy grail of security for digital transaction information? Or perhaps the fin-tech world's equivalent of Henry VIII's incorruptible Thomas Moore, unwavering in its protection of digital data in this case?

In its simplest definition, blockchain is a decentralized form of a distributed ledger--a list of encrypted transactions--that secures, records and proves a full history of all the transactions across a network of computers. A blockchain is made up of a growing set of completed blocks that are added for each transaction in chronological, linear order. As one block is added from a completed transaction or activity, a new block is generated and added to the just-completed one in the chain.

Each computer connected to the network that validates, processes or relays transactions will get a copy of the blockchain automatically. The comprehensive history contained within the blockchain data is then usable by the connected computer or access node. Blockchain is used to capture and preserve the full history of a set of transactions in what is seen by technology experts as the most secure, encrypted manner.

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It was initially designed as an "unpermissioned" model (as with Bitcoin), but organizations and consortia today are exploring alternative permissioned blockchain...