Blockchain has become a major buzzword recently, but it was actually invented way back in 2008 to power Bitcoin. In the last decade it has slowly come to the fore and now, it is being used for everything from copyright protection to data storage of medical records.
Surprisingly, Blockchain is quite a simple concept, but they more you unpick it, the more complex it becomes, and the more variable its uses appear.
How Blockchain Works
Before we dig a bit deeper into the world of Blockchain it’s important that you understand how it works at a base level. In cryptocurrency lingo a ‘block’ is a record of new transactions, and once each block is completed, it is added to a chain.
This creates a row of blocks, or a blockchain. A block can be anything from AFL Premiership betting data to transactional details or voting records, it does not have to relate to the location of the cryptocurrency.
As cryptocurrencies are encrypted any processing of a transaction means the solving of a complicated mathematical equation, and these equations become more difficult over time as the chain grows. In the case of crypto, those who solve the equations are rewarded with currency, and the process is called mining.
If you own cryptocurrency you’ll have a password or private key that is the address of your currency on the blockchain. With this key, you’re able to withdraw currency and every account also has a public key that allows for other people to and crypto to you.
The information on the blockchain is also available publicly and it is decentralized, meaning that it does not rely on a single server or computer to function.
This means that any transactions are open to public view, but that not all information can be accessed- for example medical records can be kept private and only those with the key can see them.
The Premise of a Public Ledger
If you buy, sell or send Bitcoin or any other currency to a friend the information about your transaction and its value is available publicly, but the specifics will not be.
Blockchain is an anonymous ledger and this is why so many people see it as an alterative to traditional forms of banking.
Blockchain also doesn’t belong to one specific person, and this means the ledger is open to all. This reduces the chances of data being corrupted or lost, and it is far more secure than something like cloud storage.
Some people have compared blockchain to Google Docs, and in away this is a very clever analogy.
In Google Docs multiple people can view and edit a document, all at the same time. Blockchain works a lot like this and all changes are updated in real time so that users can see exactly what’s what.
This makes blockchain ideal for use in sectors such as architecture, planning and the legal world as it provides an up to the minute map of any data input.
In the future we are sure to see blockchain used in so may different ways, and this technology has multiple potential applications, they just need to be tapped in to.