What Is Blockchain Technology?

by Steven S. App critic and consultant

Blockchain, referred to as “The Trust Machine” by an article from the Economist, is an undeniably innovative invention. Much like your car or cellphone, you don’t need to know how it works to use it. However, having a basic understanding of this decentralized technology won’t hurt. So if you’ve ever wondered “ What is Blockchain Technology?”, then this is for you.This technology, described by Wikipedia as:  a continuously growing list ofrecords, called blocks, which are linked and secured using cryptographycould be described as similar to Wikipedia, except for the main concept that makes Blockchain technology so revolutionary, its complete transparency and decentralization.

Trust, But Verify.

A phrase brought into the American vernacular by President Ronald Reagan, “Trust, but verify” is a Russian proverb that can be loosely applied to the basic idea of blockchain technology. Blockchain technology is based on the idea of creating an immutable and transparent ledger, that has public information so that consumers can trust and verify the information.

If you’ve ever bought a used car before you know that you are able to ask the car dealer for the “Carfax” or some other similar record or ledger of the vehicle’s history. On this ledger you are able to see if the car has been in past accidents, parts that have been added or fixed, car maintenance information, etc. If you decide to purchase said car, then you are trusting this piece of information to give you the correct history of your potential new/used car. Here is the problem with this style of business. Records or ledgers that come from a centralized entity can add, change, delete, or edit facts without having to keep a public record(or getting that record takes an eternity). In the case of the used car analogy, someone could have damaged their car and never reported it. Or worse, facts could have been changed to make an easy sell. Blockchain eliminates the problems of ledgers or records being tampered with or changed without public record.

Decentralizing Transactions

Blockchain allows digital information to be transparent and distributed. These blocks of information that are stored and identical across the board create a technology that is not controlled by one single entity (decentralized). The blockchain network is continually updated every ten minutes which creates “a kind of self auditing ecosystem of digital value” . Originally created for use with the digital currency, Bitcoin, more and more people are seeing the potential benefits of this transparent and immutable digital ledger.

Information that is created or held on these digital “blocks”, is shared and duplicated a thousand times over on various databases and networks and continually updated.

Creating The Chain

The simplest way to describe how to create a blockchain, is illustrated here.

  1. A transaction is made.
  2. The technology creates a record (cryptographically stored) on a public ledger “block”
  3. Using a set key and dependency between one record and another, a “chain” is created.
  4. Updates are made every 10 minutes to ensure a trusted source of information that is readily available to the public.

Advantages Of Blockchain Technology

In the Bitcoin arena, the advantages of Blockchain technology are obvious. Peer-to-peer evaluation, transparent records, and a collection of networks, make the Bitcoin Blockchain and all blockchains virtually incorruptible. In this article, by BlockGeeks, they state “altering any unit of information on the blockchain would mean using a huge amount of computing power to override the entire network.”

Other applications of Blockchain Technology include:

  • Smart Contracts – An open source blockchain project, Ethereum, is already in the works of creating simple contracts with coding that will enable specified conditions to be met.
  • Governance – Since Blockchain is such a transparent technology, this could be used for poll taking and even elections in the future. Ensuring the public a full record of immutable records.
  • Identity Management – The need for identity protection on the web is obvious in this day and ages, especially with the recent Equifax incident. Blockchain technology may be able to lend a hand. By offering enhanced methods to prove who you are and being able to digitize personal documents, Blockchain can help to build a good online reputation, which is particularly important in a sharing economy (AirBnB, Uber, OpenBazaar)

The transparency, decentralization, and verification methods of Blockchain technology, make this ledger of digital transaction, a vital resource to maintain the trust and integrity of the systems we use everyday.

Original article posted here.

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About Steven S. Junior   App critic and consultant

0 connections, 0 recommendations, 15 honor points.
Joined APSense since, October 31st, 2016, From Melbourne, Australia.

Created on Feb 19th 2018 14:55. Viewed 1,683 times.


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