Blockchain. It is probably a new terminology, or you may have heard it flying around, and when you asked what it meant, you got mocking stares.
However, it is not rocket science. It is a term that refers to a digital open source ledger. Yes, a ledger like the one used in bookkeeping but don’t get carried away with the assumption that it’s an accounting jargon. Usually, blockchain technology is called disruptive technology because it has the potential of changing record-keeping as we know it and what’s more, it can be applied to practically any sector.
B is for Blockchain
Blockchain technology is a digital platform that uses a decentralized structure for the recording of transactions. By ‘digital,’ that means it is accessed electronically using smart devices, and by ‘decentralized’ that means it is not controlled by a specific party.
It is usually used about cryptocurrency because that was its first application. Experts have said that the same way internet revolutionised communication, so will blockchain impact transactions.
This grand concept is attributed to Satoshi Nakamoto in 2008, though first utilized in 2009 with Bitcoins, the famed and increasingly valuable cryptocurrency. The idea behind the blockchain technology is to make up for the inadequacies of third parties such as banks.
At this point, you may still be skeptical because, with banks, you are able to deal with real cash unlike with blockchain. However, this anxiety is due to the ignorance of how foolproof this technology is.
How Blockchain Technology Works
Blockchain is just a distributed database that is accessed digitally. Think of it as a series of records that are found across a network of computers. Anytime a new transaction is carried out, and it is updated on the ledger (blockchain) so that each user that is connected to the network can see the changes.
Thus, the records are public, easy to verify and not stored in a single location (decentralized/ distributed).
Each transaction is entered into a block. This block is likened to a bank statement which shows the record of recent transactions. When that block is filled up, it goes to the blockchain, which is a permanent record and an accumulation of blocks. Afterwards, a new block is generated for new entries to be made. Hence, it is like using Lego blocks to build a castle.
Benefits of Blockchain Technology
If you have been following, you would understand that this technology is one of a kind. The benefits abound.
First, it is secure. Blockchain uses complex cryptography to secure each record to ensure it can’t be hacked, corrupted or copied. More so, the fact that it is a distributed network means it can’t be manipulated by any entity.
Secondly, blockchain technology ensures efficiency. An essential part of blockchain is that it is meant for peer-to-peer use. So, transactions can be easier and faster since no intermediary is involved in the process.
Also, blockchain makes traceability possible. All information relating to transactions are permanently archived, so it eliminates shady transactions.
Therefore, blockchain technology is a worthy plus to the 21st century. Though some experts have concerns about the feasibility of full integration into society as it does away with the banking sector. The possibility of improving digital security, voting, education, IP rights, real estate, healthcare and practically anything that needs record keeping seems to be silencing opposition.