What is blockchain?
This technology is a hot topic but a lot of people still don’t understand exactly what blockchain is and what it can be used for, other than the technology underpinning cryptocurrencies. This article covers a few of the basics of blockchain technology.
In short, blockchain is a distributed and decentralized public ledger. In a distributed ledger, each processor of blocks has its own full copy of the ledger. Blockchains grow by adding new blocks to a growing chain of blocks, which contain ordered records. Each block in the chain has a time stamp and is used to record transactions across multiple computers in such a way that information cannot be altered without affecting the consecutive blocks.
How does it work?
Multiple nodes execute cryptographic algorithms in order to process and verify the new block being added to the chain. For a new block to be added, the nodes must come to a consensus that both the history and signature are valid. If this is not the case, then the new block or adjustments to the ledger are denied, so they will not be added to the chain.
Because of the distributed consensus model used to verify adding transactions to the chain, a blockchain does not have a central authority, but instead authority is distributed to all of the processors on the network. In this manner, no one person or entity has complete control over the processing and integrity of the data.
“blockchain is a distributed and decentralized public ledger.”
Is blockchain secure?
It would be virtually impossible to determine if any technology was 100% secure, but this technology was designed to be unchangeable, self-governing and highly secure. The decentralized nature of this technology means that nodes detect any fraudulent behavior. Thousands of nodes are used to confirm new blocks; it is inconceivable for the combined computing power of the nodes to be defeated by any one computer.
Another secure aspect of this technology is that data on the network gets refined in order to mask its true identity. This process is called cryptographic hashing. A mathematical algorithm is applied and a fixed length, new value is created. Hashing produces a unique ID used for sensitive data; it has similarities to password protection. As well as each block having a unique hash, the private key which has access to the data is also hashed to change it to a public key. This allows people to send you assets without being able to steal them. Hashing is mathematically near impossible to decrypt.
Real world uses of the blockchain
The use of blockchain technology goes much further than cryptocurrencies. Here are a few examples of real-world uses of the innovative technology.
Blockchain has the potential to make huge improvements to healthcare. One way that blockchain can be leveraged is in the storage of patient health care information. Not only can it improve patient care and make healthcare professional’s jobs easier, Blockchain also gives patients complete control over their data, eventually allowing them to monetize their personal data if they so choose. Until now, patient data ownership has been the territory of healthcare companies and the medical profession. IBM’s blockchain division announced plans for a blockchain healthcare app. Click on the following link to read about how healthcare providers and payers use blockchain to manage trial data and medical records while maintaining personal privacy and regulatory compliance.
Walmart has already run successful pilots and has started the implementation of this technology for their supply chain management. The main reason they are using the technology is to improve food traceability and safety, and verification of ownership and authenticity.
Have you ever wondered why we do not have access to electronic voting? The reason is because until blockchain, data written to any other form of database was not immutable – it was always able to be tampered with. But not with this technology – once data is written to the blockchain-technology , it is forever immutable. Humanity can now implement something as important as voting into an electronic and widely accessible format. The use of blockchain technology prevents issues such as double voting, or votes being removed or altered. The need for counting votes will also be a concern of the past.
The Future of blockchain-technology
Blockchain isn’t perfect, like any nascent technology, it has faults. But it is technology that is continuously evolving and improving, its current shortcomings are being improved constantly. With everything in the world turning digital, our needs are changing and blockchain has the ability to facilitate many of those needs. It is highly probable that blockchain will play a large part in our future. We are making the argument that it will be transformative, and we believe we’re likely to see its full potential develop over the next few years.