By Devin Beaton. April 29, 2018.
At UppstArt, we receive a lot of questions about blockchain and how we use it to benefit artists and art collectors. Some people may have heard about Bitcoin, Alt-coins, “Initial Coin Offerings” or “Tokens”, and they mistakenly believe that UppstArt is a cryptocurrency company. UppstArt uses the fundamental technology that cryptocurrencies are based on (i.e. blockchain technology), but we are not a cryptocurrency company.
This is the first in a series of blog posts where we will explain what blockchain technology is and how UppstArt is applying it to the world of online art transactions.
What is Blockchain?
In the simplest terms, “blockchain” is a digital network of trustless transactions that forever records transactional information on a decentralized, publicly-visible record that cannot be altered or deleted. Blockchain is a type of technology that allows people to transact without knowing, seeing, relying on or trusting one-another or a third party. Instead of relying on someone else for accurate record-keeping and to ensure a transaction is completed as agreed, you can rely on the blockchain.
In slightly more technical terms, blockchain is a “decentralized ledger.” When two people make a transaction using blockchain software, that transaction is permanently recorded on an electronic ledger that is accessible to anyone and is stored on thousands of different computers instead of a central database. This means that a person can make a transaction or perform an action, record that action using blockchain technology and anyone, at any point in time, can see the exact nature of that action or transaction. The accuracy and open-source nature of blockchain record-keeping means that blockchains replace the need to trust a counter-party or third party to verify an action or transaction. This is a very simplified explanation and is subject to many exceptions, such as the distinction between public and private blockchains, but we wanted to keep it simple for now.
Blockchain vs. Bitcoin and Cryptocurrency
Blockchain is the digital technology used to create all cryptocurrencies. Bitcoin is one of many cryptocurrencies, but it is special because it is the very first cryptocurrency and the very first use of blockchain technology. There are many blockchains in existence today (of which Bitcoin is one) and new blockchains are being created regularly to address a variety of problems in various industries.
Bitcoin uses blockchain technology to address problems in the financial industry, allowing people to pay one-another using a new form of money (a cryptocurrency) instead of conventional money or “fiat” currency. Like all cryptocurrencies, Bitcoin can eliminate the need for central banks or traditional payment service providers when making financial transactions. A popular saying is that “Bitcoin is to blockchain what email is to the internet”. In other words, Bitcoin is using blockchain technology to reshape the way we exchange value with each other like email used the internet to re-shape the way we communicate with each other. However, Bitcoin is not the sole use for blockchain, just as email was not the sole use for the internet.
Other Uses for Blockchain
While cryptocurrencies use blockchain to offer an alternative form of money, the potential uses of blockchain are endless. From real estate to supply-chain to contract drafting, blockchain is being used to address all sorts of problems.
At Uppstart, we believe that blockchain technology has an enormous potential to solve many issues in the art world, both for artists, collectors and art lovers. Stay tuned for a future post about how UppstArt is using blockchain to shake things up in the art industry.