A guide to Blockchain
If you have been keeping up with the news in technology and finance over the last few months, you have likely heard about blockchain technology. While important, it can be a very confusing subject for many people to wrap their heads around. While many people believe it is just a fad, others believe it will truly be an innovation that changes the world. This article is going to introduce you to the idea of blockchain technology, get into its history and take a look at some of the current and future applications of the technology.
What is Blockchain Technology?
A blockchain is essentially a distributed ledger that keeps fully transparent records of transactions. In a sense, it provides a quick, efficient and secure way of transferring anything of value in a digital manner. Blockchains are also decentralized, which means that no centralized administrator or company is in charge of it or has the potential to manipulate it.
Instead, it is a distributed network of replicated databases that exist on many different computers (also known as nodes), in many different locations. This peer-to-peer storage option is very secure because if one of the databases on the network is compromised or hacked, it won’t affect any others. To hack into a blockchain is no easy task. You would need to hack into each and every node in the network, all while changing the exact same transaction at the exact same time.
The blockchain itself features a constantly growing list of records, which are each called blocks. Each block is linked to the previous block and is time-stamped so you can know exactly when that specific transaction took place, down to the second. The ledger is public and tamper-proof due to the decentralized nature of the nodes.
They can be helpful in proving ownership and ensuring every digital trade of information is recorded and verifiable. No one is able to go back and edit or change any of the blocks in the chain, either. All of this is also done without the need for a third party, which can add unnecessary time and money to the transaction.
The History of Blockchain Technology
Interestingly enough, blockchain technology as we know it was originally developed and conceptualized back in 2008 as an accounting method for Bitcoin. It serves as the public ledger for all transactions that take place on the network. Thanks to the blockchain, Bitcoin was able to become the first digital currency to essentially solve the “double spending” problem. This is because Bitcoin couldn’t be spent more than once (unlike other digital assets at the time) due to the public ledger and the inability for people to duplicate the coins.
Because of this inherent security and decentralized nature of blockchain, it has been used by virtually every other cryptocurrency on the market. However, as the years passed, many more uses for blockchain have presented themselves with many more to likely come in the future.
The Uses for Blockchain Technology
While blockchain technology is typically associated with cryptocurrencies like Bitcoin, they are far from the only possible applications for the blockchain. This technology could have a major impact on various industries that want increase security, efficiency, affordability and more.
Of course, industries such as banking and finance have already begun to experiment with blockchain technology. The technology can help lower transaction costs, increase efficiency in the back end and allow for greater security of important assets. However, other industries like healthcare and law also can immediately benefit from blockchain.
For healthcare, imagine having fully decentralized and secure medical records readily available in seconds, with completely accurate, time-stamped and verified details. For the law, blockchain can create smart legal contracts that take a fraction of the time, cost and effort to create. In the future, there is also talk about how blockchain technology could revolutionize everything from how people vote, to how people advertise and even how people store their data.
Those are just some of the many areas in which blockchain technology could have potential applications. Simply put, nearly every industry out there could potentially benefit from blockchain technology in one way or another, which is a good sign it might be here to stay.
In conclusion, we hope that this article has helped you to understand the basics of blockchain technology. The technology is still in its relative infancy and over the next few months or years, many more potential applications for it will be realized. While it is still new and many improvements and innovations need to take place, the technology is very exciting and could very well change multiple industries in a big way.