Blockchain, the top buzzword of 2017, but not without reason. You must have heard of Bitcoin, Cryptocurrency, Ethereum, etc. And you might have even heard of people making a fortune from it. Cryptocurrency investment is a profitable venture, and to some, it may seem easy, but that is not the case. Making money from cryptocurrencies is not easy, and is unpredictable. As market rates vary without any clear direction. While the whole world was caught up in the Bitcoin hype, the true gem got sidelined. That is the technology behind the cryptocurrencies, named blockchain.
Blockchain technology isn’t just a more efficient way to settle securities. It will fundamentally change market structures, and maybe even the architecture of the Internet itself.
Blockchain is the idea that drives it all, it is the foundation behind all cryptocurrencies such as Bitcoin, Litecoin, Ripple. And behind smart contracts such as Ethereum. This article is a short guide on Blockchain, how it works, what it does, it’s applications, and future possibilities.
What is Blockchain?
A blockchain is a decentralized, distributed, and incorruptible digital ledger that is used to record transactions across many computers.
Sounds complicated? Let’s break it into simpler terms:
- Blockchain is a distributed network of computers or nodes.
- Each node in the blockchain contains a chain-of-blocks.
- And each block in the chain contains a ledger with a list of transactions.
- Each transaction in the blockchain is incorruptible (i.e. cryptographically secure).
- And it is also linked to the previous transactions for the resource it is representing.
How Blockchain Technology Works
A blockchain is basically a chain of blocks that contains data. Each block has a cryptographic hash of the previous block, a timestamp, and transaction data. Blockchain technology is a kind of an open distributed ledger that can record transactions of two parties securely and efficiently.
Due to Blockchain being on a distributed network it is typically managed by a peer-to-peer network working simultaneously together to solve complex mathematical problems in order to validate new blocks. Once a piece of information is recorded, the data in any given block cannot be updated retroactively without changing all subsequent blocks. This requires the confirmation of the majority in the network. This is the main reason why blockchain technology is highly secure, and not susceptible to hacking.
Possibilities of Blockchain
Blockchain technology isn’t just limited to smart contracts, its possibilities are endless. The technology has applications in the finance sector, contracts, identity, data storage, record keeping, medical, and more. The blockchain is now an innovative new alternative to traditional currency, centralized banking, and transaction processes that are not only changing the way we handle financial transactions but also its alternative uses that will transform the world. In short, blockchain is a distributed ledger that maintains a continuously-growing record of every transaction across every network distributed over tens of thousands of computers. This makes it almost impossible to hack, changing the way banking is done.
Some of the main applications and possibilities of blockchain that are highly entertained are:
- Smart Contracts
- Identity Records
- Cloud Storage
- Electronic Voting
- Employees Payroll
- Medical Record Keeping
- Supply Chain Communication
Future of Blockchain: Changing the World
Blockchain is a revolutionary technology, one that is set to transform the world in the upcoming years. While the tech faces a bunch of obstacles and resistance, due to its ability to eliminate the middlemen, centralization, and make transactions visible it is still on the rise. Work is being done in various fields to integrate the technology and use its incorruptible ledger.
Once you get down and start thinking about the applications of this innovative tech are endless. This technology has a long way to go and a lot of hurdles to clear while at it but it’s on its way, and if all goes right we will be living in a decentralized world system very soon.
Blockchain: The Mainstream Hype & Drama
While the technology is as good as it sounds and has endless possibilities, it can not be used everywhere. If you are into the tech world and even remotely associated with blockchain discussions you will often encounter an over-enthusiastic individual claiming Blockchain to be the key to all problems. There was a time when I was that individual and maybe am a little still. It is important to view this tech with logic and not get swept up in the drama.
All this hype is causing more harm than good, the initial attention that the technology got in 2017 sparked a major interest in the tech industry but it also ended up attracting unwanted attention. Venture capital investors started pouring funds into blockchain technology startups as they seek to leverage the ledger’s transformational potential. And saw it as an easy money-making venture. This all while great initially will not last long as investors money scours into the wind with no result. And as is the case with many nascent technologies, it’s mostly speculative. Although the hype and mainstream attention are interesting as a technological feat, I think it will be detrimental to blockchain’s potential and possibilities.
Where do we end up on the Blockchain
While the blockchain technology still has a long way to go, and a lot of obstacles to get through, it’s here to stay. Overall the technology is a novel concept and can significantly revolutionize the way we operate.
With the innovative concepts of cryptographic security, incentive-based distributed ledgers, and a peer-to-peer network, it will not be an exaggeration to compare blockchain with the dot-com boom of the 90s. And only time will tell how far and how much this new technology will revolutionize the industry.
The ledger, the distributed database – it’s called a Blockchain – is held in the cloud by all the parties involved. It can’t be broken by any of them. It’s cryptographically too strong. You would have to compromise the entire network to take over Bitcoin.