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What is Blockchain Technology?

A Closer Look into the Disruptive Technology

Unless you have been living under a rock for the past nine years, you have heard the term ‘blockchain’ at least once before. The most well-known application for this technology is the cryptocurrency Bitcoin. Bitcoin has been brought up a lot in the news lately and has some very famous critics, Warren Buffet and Bill Gates to name a few.

However what people may not know about Blockchain technology is that cryptocurrencies like Bitcoin, are only one application of it. There are a lot more possibilities for the use of this recent technological advancement. Blockchain can transform not only the financial services industry but many other industries as well.

When did blockchain technology originally get introduced?

The blockchain concept was introduced in a white paper in 2008 by Satoshi Nakamoto, an anonymous person or group of people. To this day Satoshi Nakamoto’s identity is still unknown. In 2009 blockchain technology was first implemented with Bitcoin, the most well-known cryptocurrency to date.

What is blockchain technology?

A blockchain is a decentralized database, meaning that the storage devices for the database are not all connected to a central processor. This decentralized database maintains a list of ordered records, called blocks. Each block has a timestamp and a link to a previous block. Blockchains are secure databases by design.

Cryptography is what only allows users to edit the parts of the blockchain that they own. Users have ownership of individual blocks with the private keys necessary to write to the file.

Every transaction is recorded permanently on a public ledger. This feature of complete transparency on the ledger eliminates the need for a centralized authority managing every transaction made by participants in the blockchain.

How does Bitcoin use Blockchain technology?

What makes Bitcoin unique is this is the first digital currency that doesn’t have the possibility of duplication of the original assets. Blockchain technology is the first technology of its time to be able to send the original “block” and not a copy of it to a recipient.

Every other digital currency system in place before the release of Bitcoin allowed for users to make copies of original files. There was no possible way to send the original data to another user digitally. This system redundancy provides room for error and double spending.

What’s another theoretical example of the utilization of blockchain?

An easy way to understand the functionality of this technology in layman’s terms is to think of how you currently send pictures to friends over email or SMS.

Let’s say you were on vacation and took a fantastic picture of a sunset. You want to send the original file entirely to your friend who couldn’t make the trip.

With our current digital technology, the only way to send this picture is a somewhat degraded copy of the picture of the sunset to your friend.

With blockchain technology, you could send the entire original image through the blockchain to your friend by giving your friend your private key. The image would leave your possession entirely into the full possession of your friend through the blockchain.

You could also see in real-time when the transaction is over. If you have a forgetful friend and they somehow lost the image and doubted that you sent it at all. You could theoretically point to the ledger as proof of the transaction.

The ledger is unalterable. In this current climate of “fake news,” it is incredible that a rapidly evolving technology is guaranteeing a record of transactions that cannot change in any way.

Will blockchain technology disrupt other industries?

Blockchain technology has the potential to impact numerous industries that deal with record keeping. The most apparent industry is the financial services industry.

Other industries to look out for are:

  • The medical field with patient records
  • Real estate for land and property transactions
  • Possibly fine art transactions.

The future is uncertain of how blockchain will affect our everyday lives. However, one thing is certain, blockchain technology is not going away.

If you enjoyed learning some of the basic principles of blockchain please check our blog as we launch https://hybridblock.io/ the world’s most robust cryptocurrency ecosystem

Source: https://blog.hybridblock.io/blockchain-technology-explained/

About the author

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Suumit Shah

With over three years of experience in the field of cryptocurrencies, Suumit decided to put his knowledge and experience in front of thousands of people though BitzArena. You can connect with Suumit on LinkedIn, Facebook and Twitter.