(Editor's note: Stefano will be presenting an MSDW webcast on Blockchain and CRM on December 14.)

Blockchain is an emerging technology that has the potential to help organizations make and verify transactions almost instantaneously, streamlining business processes, saving money, and reducing the potential for fraud. You probably have heard that blockchain is the technology that powers Bitcoin. It is a decentralized exchange system with no bank or government monitoring.

Blockchain is still an emerging technology for business and government scenarios, but CRM software solutions like Microsoft Dynamics 365 are well positioned to take advantage of the security, transparency, and trust benefits. In this article I will explain some blockchain fundamentals so we can appreciate some potential CRM applications.

Bitcoin

At the heart of the Bitcoin payment system sits a blockchain digital ledger that describes a chain of transactions for every bitcoin exchanged in the system. Every time a peer-to-peer blockchain transaction occurs, it is added to a transaction block. This block contains information that helps identify where the sender of bitcoins got their bitcoins from and the various hands it exchanged: this is a chain of transactions, this is the blockchain. It is very important to track how a digital currency moves from entity to entity, since there is no physical currency here, and no centralized authority monitoring it. So, for you to be sure that the sender actually had bitcoins to pay for, you need to know where they got their bitcoin from.

Blockchain also solves the double spending problem, where an owner of digital currency could try to spend the same digital currency more than once. Every transaction is time-stamped and ...