The Blockchain, new beginnings.
Blockchain technology was invented in 2008 by Satoshi Nakamoto to serve as a digital ledger for public transactions of bitcoin. When new crypto currencies emerged, these currencies used the Blockchains ingenious code as a platform to transact.
You may ask,”what is Blockchain technology about?”Basically, unlike traditional ledgers, the Blockchain database is decentralized and has no master. This database is shared across a network of thousands, if not millions of computers worldwide.
The growing list of records are called “Blocks”and are linked using cryptography. This technology allows digital information to be distributed, but not copied. This means that each piece of data can only have one owner, the information is constantly reconciled into the database which is up dated instantly. The information exists simultaneously in millions of different locations. If one block is breached, all the other blocks on the Blockchain immediately showcase the change.
This makes the ledger virtually hack proof thanks to Satoshi’s ingenious encryption.
Why is it called BLOCK-CHAIN?
A BLOCK is a digital record of a new transaction(the ledger).When a block is completed, it is added to the CHAIN.
- The record:Any transaction or information
- The block:Is a collection of records.
- The chain:Is a collection of linked blocks.
Here is an example of how a sale or transaction is recorded on the Blockchain.
- The record:A trade is recorded when Mr A sells bitcoin to Mr Z for $100.The transaction details are listed including a digital signature from each party.The record is verified by a large network of computers that check all the details of the trade and the digital signatures.
- The block:Once record verification has taken place, the network accepts that data into a block. Each block has its very own unique code called “hash”.(A hash code is a string of letters and numbers created digitally through a mathematical function)The block will also contain the hash from the previous block.
- The chain:The block, which is now linked to other blocks by the hash codes becomes part of the ever growing chain, hence the name “the Blockchain“.
Blockchains functionality in day to day life.
Most people have heard of the Blockchain, how this technology will revolutionize the future, the hype around what it has done for crypto currencies. What is not so clear are the uses of the Blockchain and functionality in daily life and how it will benefit the average man.
Below are a few examples of how this technology will be beneficial to us all.
- Crypto currencies:Bitcoin and other crypto currencies are the first use case of the Blockchain. Because of Blockchains ingenuity, crypto currencies are decentralized, secure and are not regulated by any government or institution. Transactions are made safely and anonymously with very low transaction costs. Thanks to the Blockchain, you are in total control of your crypto currency and how you transact, without third party involvement. This is the reason that crypto currencies have been heavily touted to replace fiat currencies in the near future.
- Banking:The Blockchain has the potential to transform the banking and financial sector by reducing the high costs related to banking. With the aid of this technology which enables decentralization, clients are allowed transparency, reliability and a high level of security. With this technology in place, banks can eliminate cyber crime attacks and reduce fraud drastically. Although skeptical at first, banks and financial institutions have realized that it is a no brainer not to adopt this new tech and have started integrating Blockchain technology into their systems.
- The supply chain:Because Blockchain technology allows us to securely and transparently track all types of transactions, imagine the endless possibilities it presents across the supply chain. Every time a product is traded, the transaction will be documented, creating a permanent record of the product from manufacture to sales. This would dramatically increase efficiency, reduce added costs, eliminate human error and delays that plague this sector. From conducting audits and payments, to tracking inventory and assets, this technology would enable greater supply chain efficiency than ever before.
- Health care:Currently, patient’s health records only exist on a centralized database, which are not so secure and are often hacked. A blockchain based platform will store patient’s data in all the nodes of the Blockchain, allowing patient’s, hospitals and insurance companies access to the records securely. The technology would significantly reduce the time tracking down patient’s information and medical history. Insurance claims will be processed a lot faster because of the increased efficiency, enabling the healthcare model and patient experience to greatly improve.
- Elections:Blockchain technology would be a beneficial tool to the electoral commission for the maintenance of transparency in the voting process. The technology would streamline the process of vote counting and greatly minimize the high costs of holding elections. All the data of the election process can be verified on a publicly verifiable ledger,whilst maintaining the anonymity of the voter. Results of an election would be available instantly. The Blockchain would ensure that people do not vote twice, since there will be an immutable record of their vote, vote deletion or tampering will not be possible because of encryption. As we all know, elections around the world are always marred by controversy, vote rigging and human error just to name a few, all leading up to discord and in some cases, violence and wars. The Blockchains ingenious workings would bring down the cost of hosting an election, eliminate any uncertainties or delays, thus making elections around the world truly free and fair.
Although Blockchain technology is in its infancy, various features of this new technology such as decentralization, immutability and transparency make it appealing to all sectors of the business world.
“What is Blockchain technology about?’ It is envisioned to be technology that could propel us into the next industrial revolution, a system with traits that will take us to a new level of efficiency, its decentralization, its cost-effectiveness and that it ensures us the highest levels of security.
There is more work to be done before we fully adopt Blockchain technology in its entirety. The technology has all the fundamentals to be a success, as is fully evident in its importance in the crypto currency arena. Once fully implemented, Blockchain technology will change our lives for the better.
Where there is no change, there is no growth, all there is is stagnation, Blockchain technology has the potential to be the blueprint with which we build tomorrow today. The future is now.
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