Blockchain was the idea originally developed by a group of people known by the pseudonym, Satoshi Nakamoto. But since then, it has evolved into something greater, and the main question every single person is asking is: What is Blockchain?
By allowing digital information to be distributed but not copied, blockchain technology created the backbone of a new type of internet. It was originally designed for the digital currency named Bitcoin. Of course, you have heard the term Bitcoin, Bitcoin is one of the most popular cryptocurrencies there are. That much popular Bitcoin has become and the main reason behind the tremendous success of bitcoin is Blockchain.
Do you know how to use the internet? Of course, you do but you don’t know how it works, do you? Because you don’t need to know how the Internet works, just to use it.
Everyone who has invested in bitcoin is unknowingly using Blockchain. Just like the Internet, you don’t need to know how blockchain works to use it. However, having a basic knowledge of this new technology shows why it’s considered revolutionary.
The basic idea behind this complex but useful technology is surprisingly very easy. Blockchain technology is a form of distributed ledger technology that changed the concept of money, with the advent of bitcoin over the past decade. Blockchain offers a database, spread over a network of computers around the world where all data is stored in an immutable and tamper-proof manner without the need of an intermediary party to ensure the trustworthiness of the data. This feature of the blockchain technology enabled bitcoin to be used as a peer medium of exchange as a replacement for conventional money without the need for middlemen such as banks, credit card companies, governments, etc.
This adoption of blockchain technology has today led to the rise of several cryptocurrencies like bitcoin to enter the mainstream economy as a replacement for conventional currencies for value transfer around the world.
“As revolutionary as it sounds, Blockchain truly is a mechanism to bring everyone to the highest degree of accountability. No more missed transactions, human or machine errors, or even an exchange that was not done with the consent of the parties involved. Above anything else, the most critical area where Blockchain helps is to guarantee the validity of a transaction by recording it not only on the main register but a connected distributed system of registers, all of which are connected through a secure validation mechanism.”
–Ian Khan, TEDx Speaker | Author | Technology Futurist
A Distributed Database
Picture a spreadsheet that is duplicated thousands of times across a network of computers. Then imagine that this network is designed to regularly update this spreadsheet and you have a basic understanding of the blockchain.
Information held on a blockchain exists as a shared — and continually reconciled — database.
This way of using the network has obvious benefits. The blockchain database isn’t stored in any single location, meaning the records it keeps are truly public and easily verifiable.
No centralized version of this information exists for a hacker to corrupt. Hosted by millions of computers simultaneously, its data is accessible to anyone on the internet.
Blockchain has major advantages over centralized data-management systems.
Blockchain technology is like the internet in that it has a built-in robustness. By storing blocks of information that are identical across its network, the blockchain cannot be controlled by any single entity and has no single point of failure.
The blockchain network lives in a state of consensus, one that automatically checks in with itself every ten minutes. A kind of self-auditing ecosystem, the network reconciles every transaction that happens in ten-minute intervals.
Data is embedded within the network as a whole, by definition it is public and in turn, the whole system is transparent.
No centralized version of this information exists for a hacker to corrupt. Hosted by millions of computers simultaneously, that is why the data cannot be corrupted.