Whenever blockchain technology is mentioned, the first things that usually go with it are cryptocurrency and BitCoin. While this is one of the uses for blockchain, it is far from being the only one, so let us dive in and examine what blockchain technology is and how we can use it.
What Is It?
A blockchain is a set of blocks that have information on them. These blocks are linked by cryptography. Each block has the cryptographic hash of the previous block, the timestamp of the transaction, and transaction data.
Why Is It So Great?
Basically, it has to do with sending information from point A to point B. Every financial transaction is verified by the system and the information cannot be edited within any step of the process. This is something that is done in many aspects of our life, but, for the sake of simplicity, let’s compare it to financial transactions. As each block has the hash value of the previous block in the chain, it is kind of like paying for something using a credit card receipt that holds all of the previous transactions.
This is kind of simplified, but you get the gist of it. Now, you may wonder what’s to stop you from editing a piece of that receipt to seem like you have more money or that certain transactions didn’t take place? Cryptography is there to make sure the data is not messed with. Not only that, but every transaction is verified and becomes public knowledge, meaning that everyone has access to the info about the transactions.
Perhaps a better comparison would be with online documents, like Google Docs. If you create a document and share it with people, you know who has access to it. You don’t copy the document, you are just making the same document available to everyone in your group in real-time. Every time one of you makes a change to the document, you will not only see the change and the person who made it but the timestamp as well.
All transactions are transparent, meaning that anyone can check the data but not tamper with previous entries. Even if you did manage to change some values in a block, it would sprout another chain, which would not be the same as the chain everyone has access to.
One more thing – blockchain information is decentralized, meaning that no person, company, organization, or country has complete control over the information stored inside the chain, except, of course, private blockchains that are designed for a specific purpose inside a closed system.
Where Can We Use It?
As stated before, blockchain technology has been used in the creation of cryptocurrencies, like BitCoin, as every transaction could be easily verified. Since then, it has branched out into other industries and practices, like monitoring the supply chains of goods, updating health information on animals, creating smart contracts, and making sure voting is done in a neutral and fair manner.