Intro to Blockchains
What is blockchain technology and why should you care?
There is a technology that is talked about a lot in the news, but very few people know exactly how it works or why this technology is considered so important in the realm of technology. Hopefully, this article will shed some light on why people care about blockchain technology and why so many people see it as a great step in human development. Now, a blockchain was given a pretty good definition in an article written by the World Economic Forum in their article ‘Top 10 Emerging Technologies of 2016’:
>Blockchain–the technology behind the bitcoin digital currency–is a decentralized public ledger of transactions that no one person or company owns or controls. Instead, every user can access the entire blockchain, and every transfer of funds from one account to another is recorded in a secure and verifiable form by using mathematical techniques borrowed from cryptography. With copies of the blockchain scattered all over the planet, it is considered to be effectively tamper-proof.
Basically, a blockchain is a decentralized, unchangeable database that allows everyone to have access to the whole database while still remaining perfectly secure thanks to cryptographic algorithms. This is a huge step up from traditional databases where access to the whole database by any common user would basically be a breach in security. Many applications and technologies can use blockchain technology to hold onto data and prevent all of said data from being destroyed or held hostage if a single computer or server cluster is hacked. All of this is a huge benefit for data security and digital technology as a whole.
A lot of blockchain technology is used in financial transactions, especially for transactions with money known as cryptocurrencies. Cryptocurrencies (or crypto for short) is a digital form of currency stored on an immutable blockchain that allows people to trade the money with a centralized authority or third-party such as a bank or secondary monetary software. The currency is also released on open-source blockchains, so everyone gets to see how the system backing their financial transactions work with full transparency, unlike transactions with traditional banks who might keep how their transactions work a company secret. The first cryptocurrency, Bitcoin, was released as an open-source currency in 2009, but the basic concept of a cryptocurrency was created in 1983 by American cryptographer David Chaum with an idea called ecash. These currencies are also useful because they allow people who have no access to banks to do financial transactions. Even without cryptocurrencies, blockchains can be used to improve current financial institutions and allow them to bring their services to people who originally couldn’t access them. As the article ‘Top 10 Emerging Technologies of 2016’ puts it:
>By using the blockchain, individuals can exchange money or purchase insurance securely without a bank account, even across national borders—a feature that could be transformative for the two billion people in the world currently underserved by financial institutions. Blockchain technology lets strangers record simple, enforceable contracts without a lawyer. It makes it possible to sell real estate, event tickets, stocks, and almost any other kind of property or right without a broker.
As I pointed out in a previous article, blockchains can be used for things like the healthcare industry to securely hold data & keep this data from being held on a single database/cloud that can be hacked & stolen/held ransom. The data would be decentralized and can be accessed from multiple points but it will also be encrypted in a manner that would require a lot of processing power for a hacker to access. Thus, the data is secure and can’t simply be held for ransom by some malware.