What is Blockchain Technology?
The blockchain is an undeniably ingenious invention – the brainchild of a person or group of people known by the pseudonym, Satoshi Nakamoto. But since then, it has evolved into something greater.
Simply put, BlockChain is an encrypted, distributed database that records data. BlockChain is a growing number of records, which are linked using Cryptography. It is an entirely new way of documenting data on the internet. The information recorded on a blockchain can take on any form, whether it be denoting a transfer of money, ownership, a transaction, someone’s identity, an agreement between two parties, or even how much electricity a lightbulb has used.
A blockchain is, in the simplest of terms, a time-stamped series of immutable record of data that is managed by cluster of computers not owned by any single entity. Each of these blocks of data (i.e. block) are secured and bound to each other using cryptographic principles (i.e. chain).
Rather than keeping information in one central point, as is done by traditional recording methods, multiple copies of the same data are stored in different locations and on different devices on the network, such as computers or printers. This is known as a peer to peer (P2P) network. This means that even if one point of storage is damaged or lost, multiple copies remain safe and secure elsewhere. Similarly, if one piece of information is changed without the agreement of the rightful owners, there are countless other examples in existence, where the information is true, making the false record obsolete.
By allowing digital information to be distributed but not copied, blockchain technology created the backbone of a new type of internet. Originally devised for the digital currency, Bitcoin, (Buy Bitcoin) the tech community has now found other potential uses for the technology.
A blockchain carries no transaction cost. (An infrastructure cost yes, but no transaction cost.) The blockchain is a simple yet ingenious way of passing information from A to B in a fully automated and safe manner. One party to a transaction initiates the process by creating a block. This block is verified by thousands, perhaps millions of computers distributed around the net. The verified block is added to a chain, which is stored across the net, creating not just a unique record, but a unique record with a unique history. Falsifying a single record would mean falsifying the entire chain in millions of instances. That is virtually impossible. Bitcoin uses this model for monetary transactions, but it can be deployed in many others ways.
Potential Uses of Blockchain Technology
To be accepted on a broad scale, new technologies must deliver advantages greater than existing systems and processes. Potential benefits can include lower costs, faster execution, more reliable data, better security, ease of use, scalability, or a combination of these.
The following industries are especially likely to feel the impact of the adoption of blockchain technology.
- Financial Services – new blockchain-based system that would significantly reduce the number of parties needed to verify global payments, cutting transaction times from weeks to hours.
- Cyber Security – Adopting blockchain technology would reduce conventional cybersecurity risks by lessening the threat of hacking, corruption, and human error.
- Real Estate – The real estate industry uses outdated technology and processes, often relying on paper records to register land and property ownership. The entire process of transferring and verifying ownership is costly, non-transparent, arduous, and prone to fraud. Blockchain technology is likely to replace costly intermediaries such as title companies, lawyers, and agents with smart contracts and automatic verification of property ownership based on blockchain records.
- Global Losgistics and Shipping – With worldwide markets, the movement of goods across borders and long distances involves as many as 30 different parties — including carriers, terminals, forwarders, haulers, drivers, and shippers — requiring hundreds of email, phone, and fax interactions. Blockchain technology can reduce costs and increase efficiency by simplifying this process.
- Pharmaceuticals -The supply chain in the pharmaceutical industry is complex, with drugs passing from manufacturers to distributors, repackagers, and wholesalers before reaching the retailer and customer. There is little to no visibility throughout this supply chain to track authenticity. Companies are working with blockchain technology to bring integrity, traceability, and transparency to the global supply chain.
- Healthcare – medical blockchain solutions have “the potential to connect fragmented systems to generate insights and to better assess the value of care. In the long term, a nationwide blockchain network for electronic medical records may improve efficiencies and support better health outcomes for patients.”
- Public services – Blockchain technology will allow governments to deliver citizen services more effectively, thus increasing trust and goodwill and providing savings. blockchain-based solutions will give [anyone] the ability — without having to wait in line at the motor vehicle department or any similar place — to automatically do a transaction with the government, yet still have complete trust that the government certified that transaction.
- Charity and Arts – Blockchain technology provides another route by which charities can fundraise and accept donations. Digital artistic works are especially vulnerable to copyright infringement, thus depriving artists of their rightful royalties. A blockchain application ensures that the product cannot be transferred until the sale is recognized and payment is made.