Bitcoins. Blockchain. Digital currency. You have probably heard of these terms the last couple of years, and its importance keeps on rising, especially that of blockchain. The tech community is finding potential new ways of using the technology, which was originally devised for digital currency. But let’s take a step back; what is Blockchain?
What is it?
Back in 2009, a person or group by the pseudonym Satoshi Nakamoto was responsible for the creation of Blockchain. Blockchain allows digital information to be distributed, but not copied. This allows for the foundation of a new type of internet. Simply put – imagine a spreadsheet that is duplicated hundreds and thousands of times across a vast network of computers. Then, this network is designed in such a way that it’s checked every time a change is made. No more manual work or outdated information. If a change can’t be confirmed, it won’t be made.
The traditional way of how the internet works can be something of the past. Let’s say you create a Word document and you send that to a recipient. That person makes revisions and has to send the file back to you. Two owners can’t be messing with the same record at once (there are exceptions of course, such as Google Docs). This is also how banks maintain money balances and transfers; they briefly lock access, then update the other side, and then re-open the access.
Imagine if all legal documents worked exactly like Google Docs, with both parties having access to the same document at the same time, and the single version of said document always being visible to both parties. On top of that, the thousands of other copies verify that a ‘legal’ change is made.
Why use it?
A blockchain network constantly checks itself. It is a self auditing ecosystem of digital value. This means it is transparent; the data is embedded within a network as a whole. Secondly, it cannot be corrupted. Because if you would alter any piece of information, the entire network would need to be updated and that would require a vast and enormous amount of computing power to override the entire network. The upside is that no single entity or organisation holds the power or control over all data and therefore it is no longer in the hands of one big tech giant (such as Facebook, Google or Apple).
With every new technology or idea, there is always something that could go wrong. Imagine immutability, unhackable data sounds good, if the data is correct and just. But, what if qualities are wrongfully assigned? Or if data is not factual? Or how about when financial firms set up private blockchains to tackle the whole idea of an open and transparent network?
Does This Concern me?
The answer to this is simple: it is not a matter of ‘will it someday’? It’s a matter of ‘how soon’, due to the highly secure nature, and openness, of blockchain. There is no better and more open solution available, for now…
Simply explaining the ups and downs, possibilities and challenges of such an incredible complicated and new technology cannot be completed in a short article, but hopefully this introduces the simple basic fundamentals of the concept and provides some food for thought. In future articles, more details and specifics regarding Bitcoin will be highlighted.