What is Blockchain?
A technology called Blockchain is a global online database, so anyone or anywhere with an internet connection can use it. Unlike traditional databases which are owned by central figures like banks and government a Blockchain doesn’t belong to anyone, and with an entire network looking after it, therefore cheating the system by faking documents transactions and other information becomes near impossible.
A Blockchain is a transactional ledger, it records transactions, the movement of anything of value from one party to another.
What makes Blockchain unique is that it’s a distributed ledger which means a network of transactional partners can share a single copy of the ledger, but rather than having one copy of the ledger held by one centralized party every transactional entity has their own copy of the ledger. And what’s important to understand about Blockchain is that the technical architecture solves the reconciliation problem.
In other words all copies of the ledger are in sync and in consensus with each other all the time which removes the need to reconcile my copy of the ledger and your copy of the ledger and it takes out any inefficiencies in the transacting process. It’s also a distributed ledger which means that when we make a transaction we broadcast that transaction to a network of transacting parties who all maintain copies of the Ledger.
Here’s how it works. Blockchain stores information permanently across the network of personal computers. Not only it decentralized the information but distributes it too.
Blockchain’s millions of users make it difficult for any one person to take down the network, or corrupt it. The many people who run the system use their own personal computers to hold bundles of records submitted by others. The records are known as blocks. Each block has a timestamp and a link to a previous block forming a chronological chain. It’s like a giant Google Doc with one key difference. You can view it, and add to it, but you can’t change the information that’s already there. The blockchain enforces this by using a form of math called cryptography, which means records can’t be counterfeited or altered by someone else.
Blockchain’s most famous application is Bitcoin it’s a digital currency that is created and held electronically and you can send it to anyone whether you know them or not.
The benefits for the all society in general, from protecting our identities to running autonomous vehicles to managing a world that is increasingly dependent on the Internet of Things the possibilities of Blockchain technology seem endless.
The future is very exciting for ‘Fintech companies’, who are the pioneers using these Blockchain technologies to their advantage.