What is blockchain technology

  • 20-12-2018

Imagine a future where your mere digital presence gives you the power to own companies, access all your other electronics, and finish transactions with people from the other side of the world in the blink of an eye— all of which are conducted in a sleek and ultra-secure manner. That’s the kind of world that blockchain technology is building.

But what is blockchain technology? It’s a hot topic for those in the IT and finance sector, but elsewhere it has yet to be fully understood.

A blockchain is a consistently growing list of records that are linked and secured using cryptography. The way the transactions are grouped together is how it got the first part of its name — the block — and the “stack” of interconnected information that the blocks create one after the other resembles a chain. Hence, the name blockchain.

Every transaction that happens between ten-minute intervals is grouped together into a block and stored across the network. This means two things: first, that it allows for transparency, because data is embedded in the network as a whole; and second, that it cannot be corrupted, because any attempts to alter any unit of information on the blockchain would require tremendous computer power to override the entire network. 

A network of computers from all over the world use Blockchain technology to jointly manage the database that records Bitcoin transactions. This means that Bitcoin is managed by its network and not a central authority.

The benefits brought about by its decentralized nature has led many to believe that it could replace traditional commerce in the future. In addition to becoming a legitimate currency, it also has potential in stock market trades, record keeping, identity management, and more. As of now, the finance sector offers the most room for Blockchain development.

In contrast to the username/password system in the Internet we have all become familiar with, Blockchain security methods use encryption technology. There are two parts to the encryption: a “public key”, which is a long, randomly-generated string of numbers (used to track Bitcoins you have sent across the network), and a “private key”, which functions like a password by giving its owner access to their Bitcoin or other digital assets.

How can blockchain manifest in technology that we use on a daily basis?

Smart contracts: Ethereum is the most common example of smart contracts. Simply put, they help exchange money, shares, property, or anything of value without having to go through a middleman. It can be used to enhance security measures around an election system, design self-autonomous vehicles, and streamlines the management processes of companies and organizations.

Ethereum (@ethereumproject) | Twitter

The latest Tweets from Ethereum (@ethereumproject). Open source platform to write and distribute decentralized…twitter.com

File storage: The existence of a decentralized file storage on the internet protects files from getting hacked. Since it is stored in an easily accessible location, it also means that there is less potential for files to get lost and the hassle of combing through copious amounts of physical documents or sticking it into a folder and then forgetting about it later is lessened.

Storj - Decentralized Cloud Storage

Distributed, encrypted, and blazing fast object storage, where only you have access to your data.storj.io

Internet of Things (IoT): This is a network-controlled monitoring and management of electronic devices. This allows for the automation of remote systems management as software, sensors, and the network facilitates a widespread exchange of data between the involved objects and mechanisms. This has great implications for system efficiency and cost monitoring.

Internet of Things (@TheIoT) | Twitter

The latest Tweets from Internet of Things (@TheIoT). The best source of #IoT news, by @JamesChevalier - weekly email…twitter.com

It is a privilege to be living in the modern times. We stand on the building blocks that so many others before us have dedicated their lives to, and we continue the chain of innovation by staying curious, asking questions, looking for answers. 

Blockchain technology is the answer to questions that many have asked out of frustration. It has the potential to streamline processes, hasten procedures, and augment our control over our lives. There are so many possibilities that have yet to be explored with this new technology, and we’re looking forward to the change these future discoveries are bound to bring.

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