Since the creation of cryptocurrency, the word ‘Blockchain’ has been used rather zealously. Many people cannot differentiate between cryptocurrency and Blockchain. In fact, most if not all people think that Blockchain is cryptocurrency. Is it? We’ll see in just a while. We will also look into how Blockchain technology works and what makes it a game changer. Let’s dig in.
What is Blockchain?
According to Wikipedia, Blockchain is ‘a decentralized, distributed and public digital ledger that is used to record transactions across many computers so that any involved record cannot be altered retroactively, without the alteration of all subsequent blocks’. That is quite a mouthful, isn’t it? Let’s break it down.
Blockchain is a public list of connected records or blocks that are linked together using cryptography (encryption). Each block has some information of the previous block. Thus, Blockchain data cannot be modified. It only allows information to be distributed and not copied.
With Blockchain, there is no transaction cost, it is safe and fully automated.
Where did it come from?
This ingenious technology came from an unknown person or people named Satoshi Nakamoto. This person/persons wrote the Bitcoin white paper, and thus deployed the first Blockchain. Therefore, to answer the question raised at the outset; Cryptocurrencies cannot exist without Blockchain. However, Blockchain can be used to do more than just create cryptocurrency. Thus, Blockchain is not cryptocurrency.
Blockchain is founded on three pillars:
With decentralization, information is not stored within a single or central entity. As a matter of fact, everyone owns the information.
With Blockchain and cryptocurrency in particular, transactions are made public. For instance, you can expect to see something like the following when you perform a bitcoin transaction.
Thus, everyone can see each transaction as it happens.
iii. Immutability (Ability to stay the same)
Immutability means that once data has been entered into the Blockchain network, it cannot be altered. This property of Blockchain property can be used in financial and government institutions to drastically reduce corruption.
Blockchain Technology Applications
There are many applications for Blockchain. However, the following are some basic applications.
i. Stock Trading
When buying shares or stock from exchanges, you usually have to go through a process such as consulting with your stockbroker. With this technology, all the intermediaries are removed. This means a faster purchase and lower fees.
ii. File Storage
Much like the cloud, Blockchain will ensure your files are never lost. The files will be distributed across the network in bits. Thus, no one can access them without your prior permission.
iii. Internet of Things (IoT)
IoT is the network controlled automation of electronic devices. With Blockchain, there will be increased system efficiency and lowered costs.
Blockchain has certainly brought a tremendous shift in careers. Blockchain developers are needed now more than ever. So, if programming is right up your alley, consider Blockchain development.
In summary, we have seen that;
- Blockchain was first instituted by a person or group called Satoshi Nakamoto.
- Blockchain is Founded on three pillars; decentralization, transparency, and immutability.
This article has shed some light on the basic idea behind Blockchain and a few of its applications. With the growth in Blockchain, finance is the one sector that’s most likely to evolve. However, as this article shows, there are many other sectors where Blockchain is and will continue to influence. Whatever the case, one thing’s for sure, watch the Blockchain space!!