If you haven’t heard of #blockchain then where have you been? Many people shy away from new concepts or think, I’ll figure it out when it concerns me.
Blockchain does concern you. This tech has been operating for years. It is already mainstream and in the not too distant future it will permeate all aspects of society and no longer carry such an alien stigma.
There is so much more to blockchain technology than cryptocurrency. That is an obvious statement, but many people just associate blockchain with bitcoin.
Yes, #Bitcoin operates using blockchain, but what actually is blockchain?
Blockchain is a system of recording information.
It is a system that is immutable, meaning you can’t change the data that’s been recorded.
(Well… a #quantumcomputer may be able to, but that’s a post for another day!)
It is essentially a #digitalledger of transactions that is duplicated and distributed across an entire network of computer systems on a blockchain, which makes near impossible to hack.
You may have come across the acronym #DLT which stands for Distributed Ledger Technology, essentially what is described above. A DLT is a decentralized database managed by multiple participants, across multiple nodes.
The transactions are then grouped in blocks and each new block includes a hash of the previous one, chaining them together, hence why distributed ledgers are often called blockchains.
Are you lost?
Let’s try and simplify: A blockchain is a database shared across a network of computers.
Think of the actual concepts, “block” and “chain”.
The block is a bundle of records.
The chain is all those bundles chained together.
Let’s work through an example:
Let’s say Chris Excell is selling five of his FAKEcoins to Ed Parker for £5000.
This transaction will be recorded as a trade.
The record will detail the transaction, including a digital signature from each party.
The record will be validated by computers in the network.
These computers are called, “nodes”.
The validated records are added to a block.
Each block contains a unique code called a hash.
The block is added to the chain.
The hash codes connect the blocks together in an order.
This creates a #BLOCKCHAIN.
The bottom line is that this technology offers (for the moment) unrivalled security for the storage of data. Because of this, there are numerous uses. The most recognisable is probably #cryptocurrency, but we can park that immediately given that Blockchain isn’t all about #crypto.
Let’s consider some mainstream uses below:
Banks and other financial institutions have been investing in blockchains to streamline their transactions record-keeping. This is probably a need as opposed to a want given that they are at risk if they do not keep up with digital currencies.
It wasn’t all that long ago that we had paper deeds for our houses, bibles of parchment paper that looked as though it had been scribed with a quill. But now 87% of homes in England and Wales are registered. By registered, this means the data is stored on a central database at the UK Land Registry. If these records were stored on a blockchain, this could cut down on costly title research and insurance. It will also help resolve historical issues of ownership.
Recording trades on a blockchain offers a way to check the history of a product. For example, the luxury fashion brand #LVMH (Louis Vuitton Moet Hennessy), is launching a blockchain to help consumers track the authenticity of their products. AURA has been built using a version of the Ethereum blockchain called #Quorum, which is focused on data privacy and was developed by #JPMorgan. This software should boost consumer confidence if it is able to validate the origination of the product. Particularly in industries, for instance, the diamond industry to assure customers that diamonds are not sourced from places where they could finance war.
Have you ever tried to access your medical records? They are usually stored on a database and you have to submit a request for them. They aren’t easily accessible and there is usually an admin fee for the luxury of obtaining your healthcare data. Using blockchain, could allow medical records to be decentralised, but stored safely and securely, which would allow more accessibility and patient control.
Whilst only a few have been considered above, there is a huge appetite for the inherent possibilities of blockchain technology.
The global blockchain market size is expected to grow from $1.06 billion in 2020 to $10.45 billion by 2025. This is astronomical growth that some consider on a par with the evolution of the internet and personal computer technology (Report Linker. “Blockchain Services Global Market Report 2021: COVID 19 Growth and Change to 2030.” Accessed May, 2021).
If you don’t know about Blockchain technology, be curious because it is #thefuture.
Glossary of terms
Bitcoin: A type of well known digital currency founded by Satoshi Nakamoto in 2009.
Blockchain: A specific type of database that stores data in blocks that are chained together.
Cryptocurrency: A form of digital asset, usually maintained by a decentralised system.
DLT: aka Distributed Ledger Technology, which is essentially a record of transactions shared across a network of geographical locations, held by nodes, which eliminate the need for a centralised third party. These are considered highly secure due to their immutability.
Ethereum: A decentralised, open-source blockchain with smart contract functionality founded by Vitalik Buterin a Canadian-Russian Programmer.
Hash: A function that meets the encrypted demands needed to solve a blockchain computation. It is the backbone of the blockchain network.
Nodes: Nodes form the infrastructure of blockchain. A node contributes to the network of a blockchain by communicating with other nodes to assess validity.
Quorum: An enterprise blockchain platform being used to support business needs.
By Suzanne Natalie Jeffers, Crypto & Blockchain Enthusiast.