What is blockchain technology? The blockchain is revolutionary to the internet. Although still in the early stages of its’ development, millions of people use it everyday for cryptocurrency trading and decentralized data verification. Thousands of companies across the globe are investing in this technology for their future. Why?
What is blockchain technology, and how has blockchain developed in the past decade?
Supposedly the most simplified definition of ‘What is blockchain technology?’ written currently is:
“a decentralized, distributed ledger that records the provenance of a digital asset” – www.builtin.com/blockchain
Let’s break that down a little further:
"Decentralised..."
Instead of all data and information being controlled and copied or distributed from one person or organization…
A series of systems known as ‘Nodes‘ are placed around the globe. A Node is a basic unit of a data structure that can be any kind of active electronic computing device attached to a network. It maintains copies of the blockchain and keeps the network functioning.
"...Distributed ledger"
A ‘ledger‘ is a a book or other collection of financial accounts.
A ‘distributed ledger‘ means that this financial information can be consensually shared as a database that has no centralized administrator or core operator. This information is digitally synchronised and shared around the world to the Nodes, for verification of transactions in a process known as hashing.
"...Provenance of a digital asset"
Provenance – the place of origin or earliest known history of something (Oxford dictionary)
Digital asset – anything that exists in a binary format [non-text data file] and comes with the right to use (Wikipedia)
Blockchain technology is restoring faith in the internet with transparency, efficiency and immutability. Any changes made to the ledger are stored on the blockchain and can not be removed.
Well, this may be possible but it would be very difficult, even for computer wizards. Each of the blocks of data and information are linked and encrypted. This means that multiple blocks of data would need to be altered for any hacker to attack the blockchain, plus there would be a history of an attacker attempting to cover up any fraudulently verified adjustments to the blockchain.
Blockchain is like the permanency of a tattoo. If you try to remove it, it may not appear immediately obvious, but the evidence still remains!
Now you understand what is blockchain technology, let’s move on to how it can be used.
How is Bitcoin and blockchain technology related?
Simply put, without blockchain technology, there is no Bitcoin.
If you’re unsure as to what Bitcoins are and how Cryptocurrency works, click here for a break down guide of ‘What is Bitcoin? What is Cryptocurrency?‘
Blockchain technology was invented when the first digital currency was created in 2008 by Satoshi Nakamoto who published “Bitcoin: A Peer to Peer Electronic Cash System.” The first successful transaction took place in 2009.
4 years later Vitalik Buterin, a Russian-Canadian programmer, published the “Ethereum Project” in 2013 suggesting that blockchain may have a future in avenues beyond cryptocurrency.
How else can we use blockchain technology?
One of the main reasons why this is set to revolutionise the way the Internet of Money works is because of how malleable and flexible the technology is and how easily it can be adopted into and between industries.
- Banking – increased accuracy, security and transparency
- Real Estate – use of smart contracts to increase efficiency of handover, reduced fraud and errors in public reports
- Healthcare – improved management of patient records, increased efficiency between departments
- Music Industry – artists will receive higher and faster royalties, bypassing administrative fees
We hope we’ve answered your questions about ‘what is blockchain technology?’ and ‘how can blockchain technology be used?’. Leave us a comment below if you’re unsure of anything and we’ll be sure to get back to you with questions you may have!
Where to learn more:
If you’re interested in learning more about how blockchain technology works, or better still how you can get involved, check out the Ivan on Tech Academy, the ultimate educational suite for crypto & blockchain!
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