The blockchain is a globally distributed ledger, capable of recording and permanently storing any kind of data. This distributed ledger is protected with cryptography, which makes it resistant to attack and alteration.
The term “blockchain” has become quite popular in the last few years, but not everyone understands the technology that underpins it. In this article I will describe what the blockchain is and how it works. I will also discuss some of the ways in which this technology will disrupt our modern lives.
A comprehensive history of blockchain technology was recently published by Don & Alex Tapscott and I encourage you to read it if you would like to know more about how this technology evolved and its early applications.
Blockchain is a distributed digital ledger. There are many uses for blockchain, but the most relevant to this discussion is the ability to store digital data and information on an immutable ledger that can be shared across multiple networks. This technology allows for data accessibility, transparency, and auditability.
In financial services, blockchain will impact how we handle payments, loans, and mortgages. In healthcare, it will affect how we manage patient records and medical bills. In law enforcement and government agencies, it will influence how records are tracked and shared.
What does this mean for the common person? The food you consume will be safer to eat. The products you buy will be easier to return or exchange. The car you drive will be safer to operate.
Blockchain technology has the power to disrupt many industries because of its ability to create greater trust at lower costs. In fact, Gartner predicts that by 2022 blockchain-based business value could reach $3 trillion.
A blockchain is a distributed database that maintains a continuously growing list of records called blocks secured from tampering and revision.
Each block contains a timestamp and a link to a previous block. A blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for inter-node communication and validating new blocks. By design, blockchains are inherently resistant to modification of the data. Once recorded, the data in any given block cannot be altered retroactively without alteration of all subsequent blocks and a collusion of the network majority.
Functionally, a blockchain can serve as “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.” For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without alteration of all subsequent blocks, which requires collusion of the network majority. Although blockchain records are not unalterable, blockchains may be considered secure by design and exemplify a distributed computing system with high Byzantine fault tolerance. Decentralized consensus has therefore been claimed with a blockchain.
Blockchain was invented by Satoshi Nak
Blockchain is a shared, immutable ledger for recording the history of transactions. In simple terms it is a digital logbook that stores every transaction that has taken place. As a result, blockchain could be used as a permanent, transparent record of all votes cast.
The use of blockchain technology in elections was first tested in Sierra Leone’s presidential election in March 2018. The distributed ledger was used by the country’s National Electoral Commission to count and publish results from 10,000 polling stations across the country. Although this was only a limited test, it captured the attention of governments around the world.
The technology could be adapted to create an unchangeable and publicly accessible record of votes. Once a vote has been recorded on the blockchain ledger it cannot be altered or removed. Therefore if every vote was registered using blockchain technology we would be able to know for certain whether any votes had been tampered with or changed. In addition, no-one would have access to change the vote once submitted, therefore eliminating the issues caused by human error or potential corrupt individuals with administrative privileges within election bodies such as Russia’s Vladimir Putin or the USA’s Donald Trump.
The blockchain is the main technological innovation of Bitcoin, where it serves as the public ledger for Bitcoin transactions.
The technology is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. It’s basically a database that nobody owns and everybody can write to, but which is secure against tampering. It allows you to create “trustless” systems: systems where participants don’t have to trust each other in order to work together.
There are many potential applications of the technology currently being explored, including:
* Using cryptocurrencies like bitcoin as a payment system.
* Storing medical records securely in a way that preserves patient privacy but allows doctors to be able to access them.
* Supply chain tracking, so you can tell exactly where something was manufactured and what was used to make it at every step of the process.
* Voting systems that allow remote voting and prevent vote-rigging or voter intimidation.
* Creating decentralized autonomous organizations (DAOs) which are basically companies run by programming code instead of people. These could be anything from a business, a charity or political organization, up to and including a country or even planet-wide government.
Blockchain is a distributed system with no central authority overseeing the data. The data is shared among all participants in the system, and once entered, it cannot be changed or tampered with. These characteristics make blockchain suitable for storing records of events and financial transactions.
The first use of blockchain was as the technology underlying Bitcoin, a digital cryptocurrency. It has since been used to create applications other than money. For example, the Ethereum project allows you to build smart contracts into your own blockchain. Smart contracts are programs that execute automatically when certain conditions are met, such as receiving input from another contract or account.
One example of a smart contract is an escrow contract. Before we dive into this example, let’s look at how escrow works without a smart contract. Typically, Alice puts her house up for sale on an online real estate marketplace and Bob wants to buy it. There are two parties involved: Alice and Bob, and one trusted third party (TTP) – an escrow agent – who acts as a middleman between them.
In this case, Alice deposits her house ownership document with the TTP before she publishes the property on the marketplace. Bob can then see that Alice owns the house she is selling and can agree to purchase it from her by paying
Blockchain technology is a machine for creating trust. It allows people who have no particular confidence in each other collaborate without having to go to a neutral central authority. Simply by owning a computer connected to the Internet, you can now do business with people you don’t know and don’t trust, and if the transaction turns out badly, there’s not much they can do about it.
And that’s why people are so excited about it.
Wealth has been created this way before. When money was invented, it made possible one of the critical building blocks of civilization: trade between strangers. Before you could make money by specializing in something, you had to own all the tools you needed to survive: a farm, or the right trade skills, or your own weapons and armor. If you didn’t have those things, your options were limited: either go find some land or loot someone else’s; either learn some other useful trade or take up banditry; or join an army and hope to be promoted and get some land when you retire—the military-industrial complex in its primitive form.
Money cut through all this like a hot knife through butter. Now if someone wanted wheat but had nothing but cows to offer in exchange, he could just sell some cows for