What is Blockchain Technology?
Blockchain Technology is a hot topic in the tech world. Nobody really knows what the tech is or how it works – but everybody’s talking about it! In a nutshell, blockchain is a decentralized technology that’s been developed to make transactions more secure.
First things first: you can’t talk about blockchain-based networks without mentioning Bitcoin. It was the groundbreaking cryptocurrency that made blockchain popular for public view and now companies are scrambling to use blockchain in order to stay relevant.
But wait! Blockchain-powered networks have tons of different potential uses outside of finance and they’re showing up all over the place: supply chains, property, transportation, voting – there honestly seem to be no limits to what can be done with this new form of data protection.
Blockchain is a form of distributed ledger technology that combines cryptography, computers, and network software to create an immutable, decentralized digital record of data. Distributed ledgers are separate from the existing financial system (e.g., central bank) because they are currently controlled by a small number of large institutions (e.g., banks).
There are three key principles behind distributed ledger technology:
Blockchain technology can be used to:
1) securely distribute all operations within a network (like Bitcoin), allowing users to update transactions without going through a third party (e.g., bank) or clearinghouse. In other words, it’s impossible to amend data once it’s entered into the chain.
2) enable the collection of transactions and data from different sources (like a company’s supply chain), making it easier to track a product’s overall inventory.
3) share data while eliminating the need to trust third parties to maintain accurate records (e.g., voting).
There are two main sorts of blockchains: private and public. Because blockchains are distributed, they become difficult to censor or manipulate.
The main difference between a public and private blockchain is the level of access granted to other users. A public blockchain would be one that anyone can see, while a private blockchain requires permission for transactions to be processed.
In the world of cryptocurrencies, Bitcoin was the pioneering cryptocurrency that used blockchain technology and introduced the concept of decentralized ledgers. Since Bitcoin’s release in 2009, hundreds of cryptocurrencies have hit the market with varying levels of success.
As cryptocurrencies have gained popularity, many entrepreneurs are using cryptocurrency to disrupt traditional industries (e.g., property registration) and create entirely new types of businesses (e.g., Decentralized Autonomous Organizations (DAOs)).
For example, a new company called Bitproof is using blockchain technology to verify the existence of documents to prevent fraud and help reduce corruption.
The popularity of initial coin offering (ICO) has increased dramatically in the past year. An estimated $1.25 billion was raised via the ICO route globally in 2017, compared with a total of $96 million raised in 2016.
This increase in the value of cryptocurrencies has sparked many entrepreneurs to seek alternatives ways to raise money for their ventures, including ICOs.
Though public blockchains are still relatively new, they’re being adopted at an alarming rate by businesses and governments alike. The future of blockchain technology is impossible to predict, but it’s safe to say that this new technology will continue to make a splash for years to come!
A blockchain is a decentralized and distributed digital ledger that is used to maintain a continuously growing list of records, called blocks, secured from tampering and revision. Blocks are secured by complex mathematical computations and are verified by the network nodes. It can be described as a chain of blocks, each block containing a hash of the previous block prior to it. Blockchains facilitate regulatory compliance and trade finance, among other business applications.
The Blockchain Technology Collaboration Council (BCTCC) is a global non-profit industry consortium established to advance blockchain technology standards, governance and evolution. Consistent with its mission of increasing blockchain adoption for all industries, the BCTCC provides an open forum for collaboration on technical issues related to blockchain technology standards, governance and evolution.
A very interesting example of how blockchain will change the world is land ownership. A company called Deedcoin allows you to own land and build on it without having to collude with the government. This is done using blockchain technology, so titles are transferred directly from owner to owner rather than going through the government. It is an interesting application of blockchain technology that will make things simpler for people involved in real estate investments.
The credit score system is another application of blockchain technology that goes beyond just finance. A new blockchain-based credit score system, Synchronicity, can help people decide whether or not they should borrow money by assessing their history of payment with a company or individual, as opposed to the traditional credit score systems which only take into account an individual’s past financial history.
Another promising blockchain technology application is digital identity and the complex legal system it will have to go through to be accepted. Considering how a lot of money is spent on contracts, lawyer’s fees, and other expenses related to the global economy, this application may reduce some of these external costs.
Digital identity is also beneficial for startups that need to do a KYC (Know Your Customer) process before opening an account with them. This eliminates some of the cost and time that goes into setting up a business or service. Blockchain technology can also store medical records securely in the same way as financial records and can provide more secure insurance services because data can be encrypted by using blockchains.