Where Did Blockchain Technology Come From?

April 19th, 2018

Computers organize and store information in a database, the most common one is called a relational database. An example of a relational database, is Excel Spreadsheets; it structures information in separate tables consisting of rows and columns. All these tables are then stored on hard disks or drives which can be accessed by servers from any part of the globe over the internet.

Modern day mobile phone contact book apps are another example of technologies that are built around a relational database. The Smartphone app relates phone numbers to various people in the address book in a simple and logical manner. With this app, users can remove, add, edit or even retrieve information from a relational database using requests or special instructions. However, as more information is added to the database and more users try to retrieve data, these systems tend to become slower and it becomes harder to process with the increase in number of requests.

To cope with this growing strain on computer processors and hard drives, database companies need to spend their time building, designing and installing faster and more efficient systems. They also need to implement additional software to keep data safe from malicious activities.

The expense involved in maintaining and building an IT infrastructure at such a scale is great, which is why companies need to find ways to earn money from the data they create. What they currently do to monetize the wealth of all data they’ve accumulated over a certain period in databases, is sell user data. Selling user data to companies and advertisers which are looking to maintain a competitive edge is one lucrative and widely practiced way to monetize the system. A few years back popular social networking site Facebook acquired WhatsApp with a huge $19 billion deal. This dramatically illustrates how valuable user data is to any organization and how much they will pay for it.

According to a recent survey, data is now around a $300 billion industry every year. This is all due to the fact that countless numbers of people are willing to sacrifice privacy for free software. The truth is that many people are letting these database firms collect your personal and highly confidential information just for access to your favorite websites, social media sites, and apps.

Blockchain technology is a new concept that can protect user data in a different manner. Blockchain technology is an alternative way to transmit and save data between two systems or computers while keeping it private, secure and decentralized. The main purpose of Blockchain is to safeguard user data in a whole new way.

How Does Blockchain Technology Work?

Before computers, people used to keep useful documents safe by making several copies of the document and storing them in treasure chests, steel safes or in bank vaults. For added security, these documents were sometimes written in a secret language that only the owner could decipher. If someone managed to break into the vault and steal private information they wouldn’t have be able to understand the cryptic messages.

Blockchain technology puts this idea on steroids. Imagine if you and several other friends are able to make copies of useful files, encrypt it with any special software and save it digitally in computers over the internet. With this new digital system, even if the hacker breaks, destroys or steals your system they won’t be able to interpret data. All your data will be within a network of friends giving you all necessary backups to your important files.

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