The blockchain technology is very popular nowadays, in relation to bitcoin, one of the hot topics of the present time. But the possibilities of the blockchain far exceed the field of the digital portfolio of the crypto coins, the field that brought it to the limelight.
Blockchain: what is it? How does it work?
But let’s go step by step. After all, what is blockchain? What are “chain blocks” all about? The meaning of blockchain technology can be explained simplistically as being a vast digital database, strongly marked by its incorruptibility and its distribution/decentralization.
This large digital record is distributed around the world by a computer network, constantly keeping all the changes made to its information.
Imagine that instead of storing the information in a single safe, susceptible of being assaulted, there are huge vaults scattered for safety. These safes require separate and unlikely actions to happen (more than half of the network must accept changes in information).
This database is public and can be accessed by any internet user. As there is no centralized version, it also has security, helping to prevent fraud while preserving authenticity.
The database does not allow tampering, and it is not possible to change operations, which have been verified by several computers, which confirm the transactions performed.
Blockchain and bitcoin – the chain link
The blockchain consists of a decentralized information system that emerged with the crypto-coins, and on which they are based, recording their transactions, without the intervention of third parties. Both were invented in 2008 by Satoshi Nakamoto – pseudonym of the enigmatic bitcoin coiner.
A blockchain works with chained blocks that carry content together with a digital fingerprint. In the case of crypto coins, we are talking about financial transactions. When a transaction occurs, details are added to a block that already has recent transactions of the same kind. It is up to the miners to verify the validity of the transactions.
If the verification results in validation, the subsequent block will contain the digital fingerprint of the previous one, added to its own content. With these two informations, it generates a fingerprint of its own, arriving to a record that can be seen by anyone, and to the concept of the blockchain.
This process continues unceasingly, generating a trust record of the transactions carried out.
Applications of the blockchain: there is life beyond the crypto coins
But there is life in the blockchain beyond bitcoin. Lots of it. The applications to this technology are immense. Some examples of this are:
- passing diplomas;
- establish various types of contracts;
- give legal consents;
- to vote electronically;
- ensure the freshness of food;
- ensure that donations reach their true recipients.
Blockchain technology allows you to cut down on manual verification processes, intermediaries, and costs, as well as save changes automatically, simplifying all procedures, which are usually rooted in a huge bureaucracy.
There are already those who call the blockchain as the “new internet”. Just as the internet has changed the press and media, or commerce and advertising, major changes are expected with the blockchain.
This is in fields such as banking, insurance, economics, legal area, health, and even fashion and music. Basically, in everything that refers to copyright, property, purchase, and sale, international payments, consents and registration can be affected by this technology.
Blockchain: an ocean of possibilities
Internet of things, networking, cybersecurity, data, supply chain management, private and shared means of transportation, cloud storage, government, public benefits, energy management, retail, real estate, crowdfunding are other examples of areas where blockchain can change the rules of the game.
The decentralization provided by this technology can create new opportunities for businesses, or otherwise disrupt their operation. New business models should be developed with this technology in mind.
Decentralized model apps (dApps) also promise to sow innovation, opening the gates to independent developments. Many scenarios may develop with the blockchain. Just sit tight to watch its big bang.