What is blockchain? A FAQ for the uninitiated

WTF is a Blockchain?

Ok, so you’ve come to this website in search of information about blockchain. For crying out loud, it seems like everything is just for tech geeks…and you’d be right.

But that’s why we are here, unicorn and all! We want to give you information in terms that anyone can understand, not just super computer nerds.

Bitcoin

So, blockchain. Since it’s such a new technology, there’s a chance it may not have consciously crossed your radar. Let’s take a different route:

Have you heard of Bitcoin?

Bitcoin blockchain logoIf so, turns out you may have known about blockchain all along! If not, it’s ok! It’s an online currency that isn’t backed by a specific government, instead relying on a decentralized payment network. Bitcoin transactions are bundled up into “blocks” of information and recorded permanently in a distributed ledger. Each block contains the transaction information, as well as a timestamp, and connects to the previous block—hence the name: block-chain.

In more simple terms, any transactions that happen with Bitcoin (and blockchain) are documented in such a way that it cannot be changed once it has been recorded. So what does that mean? It basically comes down to the fact that once something is registered in a blockchain, the information is there for good.

History of Blockchain

Bitcoin, like other cryptocurrencies, is only a tiny piece of what blockchain can do. You may wonder,

If it can do so many darn things, why don’t I hear about it more?

Fabulous question, but let’s get a bit of history under our belts before we jump into that. The concept of encrypted, secure chains containing blocks of information has been around since the ‘90s. It didn’t come to fruition, though, until 2008.

Blockchain’s underlying technology was originally written into Bitcoin’s code. Once Bitcoin was introduced, it became clear this newfangled thing was much more than just for money. For a number of years, Bitcoin was the main use of the technology, and other online currencies have since followed suit. These include:

Now it seems that even industries see its potential, such as the financial and healthcare fields.

Ethereum & Smart Contracts

How did blockchain make the original jump from cryptocurrency to full-fledged technology?

Ethereum blockchain logoThe realization that Bitcoin could be more than money ultimately lead to the creation of Ethereum, a second-generation blockchain system. It was built on the concept of taking contracts and making them “smart contracts.” Instead of only allowing cryptocurrency to change hands, Ethereum rests on the idea that other things may be placed onto the blockchain.

These smart contracts can be implemented in wide-reaching ways across many industries. The financial industry, for example, is poised to carry out the implementation of blockchain this year. Many healthcare companies are opting into these smart contracts, in order to up security for patient information. To answer the original question, blockchain, and subsequently cryptocurrency and smart contracts, are already being used at this very moment in every day life. Once you open your eyes and ears, you’ll realize how frequently you run into the technology.

Blockchain and You

Okay, well, cool I suppose. Sounds like a lot of big companies and industries are going to use the technology. That’s awesome and all, but…

Why in the world should I care about blockchain?

Another fantastic question, my friend. Since we’ve taken a look at the industry/big business side of things, let’s jump into why and how blockchain can affect a single person.

If you’re a Facebook user, have a Gmail account, or have ever Googled something, blockchain can directly impact your life. Every single time you log onto Facebook and like a picture, write on someone’s wall, or share an interesting post, the social media platform records your moves. It tracks this information so closely, it has the ability to predict things about you with eerie accuracy. Thanks to its 1.1 Billion+ users, Facebook has a lot of information about a lot of people across the globe. With that much data at its fingertips, it begs yet another question:

What the heck do they do with all of my data?

Evil robot
Who’s doing what with your data?

Sell it. Let me reiterate. They sell it.

Your information is bundled up with millions of other users and sold to companies, in order to target you in a more personal manner. When you receive information that’s tailored specifically towards your likes, you are more likely to complete whatever action these companies may ask of you. These actions may include signing up for a newsletter, subscribing to a social media channel, or making a purchase. Actions come in many forms, but really come down to what the company is trying to influence you to do.

 

What Can I Do to Stop This?

Jeez Louise, that’s awful! How can I stop this?

And this may come as no shock to you, but blockchain is the answer to your personal identity woes. It allows you to take back control of your online persona—your identity on the Internet. With every passing day, more blockchain or Ethereum-based applications are popping up to help solve this issue. These applications are specifically referred to as Dapps (pronounced “dee-apps”, like “email”). In order to earn the title of “Dapp”, it must exist on the blockchain, be open-source (no single entity controls it), and fulfill a few other requirements.

Because the way a blockchain is created—as a distributed ledger—many points connect over a network. As previously mentioned, this is referred to as a decentralized, or peer-to-peer (P2P) network (read more about decentralization here). If someone wants to hack the network, he must get into all of these connected points at the same time. The chances of this are extremely low, which really illustrates the security surrounding blockchain technology. Once you’ve stored your personal information on the blockchain, you’ll be well on your way to regaining control of your identity.

Looking Ahead

Blockchain is the next massive thing on the horizon. Whether or not you know a lot about it right now, you’ve come to the right place to grow your knowledge on this technological giant. So really, when someone asks:

W.T.F. is a blockchain?

We can already tell them: Blockchain is a chain of information with a timestamp that cannot be altered once it’s been recorded. And let them know to keep a lookout for mentions about blockchain. You might surprise yourself with how much you already know!

If you’ve hung around this corner of the internet you might find our essential wallet guide helpful. Or if you’re introducing someone new to cryptocurrency they might want to check out out our guide to buying & selling. If you feel we’re missing any critical information, please reach out and contact us!