October 22nd, 2017
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 of records, called blocks, which are linked and secured using cryptography, could be described as similar to Wikipedia, except for the main concept that makes Blockchain technology so revolutionary, its complete transparency and decentralization.
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.
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.
The simplest way to describe how to create a blockchain, is illustrated here.
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:
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.
If you would like to learn more about blockchain, Invest in Blockchain has put together this highly informative article together and it explains this technology in a way anybody can understand.
