Did you hear about Blockchain? Probably, that does not concern you as life still sailing smooth without it. You don’t need to be a nerd or a technology enthusiast because it’s definitely going to future of lot of things we do. Lets explore what is so revolutionary about this tech which is a talking point across newsrooms, social media, and people around us. You won’t be missing out much when your friends are talking about Blockchain technology. To start with, we must clear the air that Bitcoin is not Blockchain. Actually, it’s a derivative of Blockchain.
It’s a myth that Blockchain is free and cheap to run. It requires several energy hungry computers to solve a mathematical algorithm to finalize a ‘block’. Someone needs to pay for all the computer power that supports the Blockchain service.
Let us start with a real world example. You (MoneyLover) wants to send a payment to a friend (MoneyHungry) living in a different country. Such transactions involve banks, who validate the transaction. It comes with a small fee levied for the provided service. The transaction will not be instant on occasion of a holiday or bank off day. Needless to say there will be laws of both the countries coming into play. Blockchain powered digital currencies do not need such intermediate authorities to transfer money. Blockchain enabled digital currency can transfer funds to the recipient. It is is also termed as a peer-to-peer transaction. Blockchain provides a platform for these two people to transfer funds to each other by working around the conventional banks. Here are some important points which are critical to Blockchain understanding and it will be easy to understand and remember:
- Blockchain ledger (casual term “database) is a collection of all transaction blocks.
- The transactions are stored in a unit called as a “Block” and each block is interlinked with each other.
- High end Computers running Blockchain software are called miners. Miners solve mathematical problems that are a result of the encryption protecting transactions on a Blockchain network.
- When a transaction is validated, the block is added to the Blockchain ledger. It will be replicated to each Blockchain running Computer making it decentralized and public.
Blockchain Technology Advantages
There is no single authority or company owning the Blockchain and its transaction. As a matter of fact, users are the owner of the data and if someone tries to fudge or change any transaction, it will be rejected by copy held by other users. No one can hold Blockchain data hostage for their own benefit as users can immediately point out the discrepancy. It is very unlike centrally held transactions which is impossible or difficult to validate.
Blockchain technology is an open source one that means any business can modify it as per their requirement. A Business can deploy it as per their specifications. As mentioned in previous section that Blockchain ledger is publicly accessible. It makes it impossible for someone to alter transactions already logged in Blockchain. This makes Blockchain technology very secure too.
Finance sector has seen great potential in Blockchain in the form of cryptocurrencies e.g. Bitcoin, Ethereum or Monroe. A digital currency transaction is almost instant compared to conventional financial transaction. The self dependent structure of Blockchain is one of the compelling reason for digital currency dominance. Blockchain’s potential is beyond cryptocurrencies and the possibilities seem limitless.
- There are serious efforts in conducting elections as the technology is tamper proof and incorruptible.
- A marketplace for intellectual property built on Blockchain. It can provide assurance and guarantee of authentic goods.
- Digital smart contracts has become a reality with the help of Blockchain. It can hold insurance premiums, legal processes, property contracts, lease and legal processes.
This is a very layman description of Blockchain, saving your from intricacies. The narrative might change in future with constant research and development initiatives underway. Please let us know what is your thought about the future of Blockchain, looking at its current standing.