Blockchain technology has shown it’s potential in the form of cryptocurrencies, but most people don’t know what a blockchain is. A blockchain is a distributed digital ledger that can record information in permanent and unalterable manner. Jeremy dives into blockchains, their properties, and the potential blockchain has to help the world! Check out the video above, or read about it below!
Keeping records has been an issue since the beginning of recorded history.
Keeping track of inventory and who owes what has always been a struggle. The solution that ancient civilizations came up with is a method called double entry bookkeeping.
This system calls for two separate ledger’s maintained by separate parties that keep track of all debits and credits. To say this method has caught on is a massive understatement. This has been the underpinning of our financial systems ever since and we’re talking thousands of years. Our whole banking system is built upon this principle with only the bank and you having access to your record of transactions.
Enter blockchain technology…
In response to a 2008 financial crisis a new technology was outlined, and it would later become known as blockchain. Blockchain is a decentralized ledger that reports all transactions yet is view-able by the public. The transaction is permanently recorded to the blockchain and cannot be changed by anybody. This essentially created an extra digital ledger distributed to anyone who wants to view these transactions. This creates a level of accountability as most ledger’s would have to be changed in order for that become the truth on the blockchain.
The name blockchain largely refers to the structure of the technology. Blocks contain data that represents these transactions and when a block is mined or created, all the data contained in the block becomes canon and is added to the chain. Permanently. All ledgers are updated to recognize this new consensus. Blocks are then linked together to form a chain and can be referred back to at any time. (Hence, block-chain.)
What blockchain can do…
Although it was the blockchains first purpose, the use cases for blockchain technology are not limited to currency. Users have used blockchain technology to keep permanent immutable records perfect for purposes such as voting, or keeping track of ownership.
There are several other industries that are heavily researching the impact of blockchain. They include law firms that are looking into programmable smart contracts that could enforce legal agreements without expensive third parties. Governments are looking for secure record-keeping and more efficient operations. Accounting firms are looking for a better way to conduct assurance.
And we haven’t even mentioned banking or finance which blockchain offers several potential applications for. You’re watching the potential uses, which only makes the technology more exciting because of the potential impact to so many different industries.
Room for growth & a better Internet
A lot of this is conceptual, but that is quickly changing. This technology is young — less than ten years old. It’s like the Internet was in 1989, lots of potential for a disruptive technology, and use cases are quickly turning concept into reality.
People are talking about blockchain like it’s going to be the next evolution of the Internet. With the lack of privacy and control provided by the current Internet, it’s only natural that users would be looking to reclaim some of these rights.
The creation of blockchain gave us the realization that we could, in effect actually have a better Internet that provides more freedom. Currently we place a lot of trust into centralized institutions and some of them have exploited that trust.
Banks in 2008 are the perfect example. Hacks are routine. Businesses are trying to use your personal data for profit. So it’s very difficult to claim that there’s any real level of privacy on the current Internet.
Trust makes the world go around. Think about it, you have basic assurances with every purchase you make. You’re placing trust not only in the producer to get you the product, but also a third party payment processor. With blockchain technology trust does not have to be placed into person or a centralized group of people. The technology is the only thing that has to be trusted which mitigates opportunity for fraud and generally unscrupulous actions.
So that’s a rundown on WTF is a blockchain, it’s kind of a heady concept so if you have any questions and discussion throw those down below in the comments and we’ll be happy to answer those! And check out our full guide on WTF a blockchain is too, for more information!
WTF IS is our new series where we explore some of the most frequently asked questions about blockchains, cryptocurrencies, and the technology surrounding these fields. Looking to get acquainted with blockchain? Then WTF IS is the perfect series for you!
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