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64 I N D U S T R Y I N S I G H T / K A T I E J O K E E L I N G You have to look no further than the front page of the Wall Street Journal to learn about Bitcoin these days. Its exponential rise in price has captured the attention of both Wall Street and Main Street alike, but because of its price volatility, its questionable source of value, and the security breaches resulting in theft from exchanges, many people continue to view Bitcoin as a house of cards built on thin air headed for an inevitable collapse. If you dismiss Bitcoin as just noise, you're overlooking the most important thing about Bitcoin—it utilizes blockchain technology, the most revolutionary technology that has entered the marketplace in decades. To stay relevant in the fintech sector, it's important to at least have a basic understanding of blockchain technology, and the use cases being explored today that could have an impact on mortgage markets. BLOCKCHAIN IN PLAIN ENGLISH Blockchain, at a basic level, is a new way of keeping track of information between parties who need to share and trust that information. Many of the blockchain pilots underway today are simply trying to store and share data in a more efficient, secure, and transparent manner. "All blockchains or similar 'distributed ledger technologies' have a common set of characteristics," said Ashley Lannquist in a "Blockchain at Berkeley" blog. Lannquist explains that blockchains are "digital ledgers or logs that record electronic transactions that occur between two parties. e two parties do not know each other and directly engage in a peer-to-peer network of connected computers. Rather than relying on a third-party middleman (ex. PayPal, a bank, etc.), the network collectively reaches agreement ('consensus') on which transactions are legitimate using a consensus mechanism. By 'legitimate', we mean that, for example, Alice sends money to Bob and does not spend the same digital currency twice (called a 'double spend') or do anything else malicious." 1 Each type of blockchain platform can have a different set of rules for how a consensus must be reached to determine the legitimacy of a block, but all mechanisms entail a system where the validators, often referred to as miners, are incented through rewards and/or transaction fees to only approve blocks that contain legitimate transactions, and then others in the network must agree with the determination BETTERING MORTGAGE LINK BY LINK Unearthing the potential of blockchain technology to revolutionize the mortgage industry.