Decoding The Blockchain Technology For Pros and Noobs
It’s usually said that technology when explored to its full extent and applied in the rightest of the spirit, can bring something similar to magic. From things we’ve taken for granted for years to come up at a stage where we’ve witnessed path-breaking innovations, the world of technology has evolved a lot. There’s a complete 360° innovational change in the field of agriculture, health services, education, and mobility. And one such technology that has been creating a buzz for a while now is Blockchain technology.
Going back in history, if we’d look at the origin of Blockchain technology, it was founded by a person or a group of people known by the pseudonym, Satoshi Nakamoto in 2008. By allowing digital information to be distributed widely and not copied, blockchain technology has created the backbone of a new type of web. Originally devised for the digital currency “Bitcoin”, Blockchain has been in continuous development and is rapidly changing the business models.
What is a Blockchain?
The blockchain is an unscrupulous digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything that holds value.
To understand in a simpler way, blockchain can be understood in terms of a growing list of records that are called as ‘Blocks’. These blocks are linked using cryptography which is basically done in order to secure data while communicating.
Chaos Around Blockchain Technology
While this technology is being increasingly adopted by countries, industries, and people worldwide, there still seems to be a lot of confusion and skepticism around it.
And to begin with, quite a majority of people think that blockchain and Bitcoin are synonymous, when, in fact, they’re complementary technologies. Blockchain, which was invented to account for Bitcoin, is an open, decentralized ledger that records transactions between two parties in a permanent way without needing third-party authentication. This creates an extremely efficient process that is expected to dramatically reduce the cost of transactions.
History & Enhanced Security Through Blockchain
The first work on a cryptographically secured chain of blocks was described in 1991 by Stuart Haber and W. Scott Stornetta. The duo wanted to implement a system where documents’ timestamps could not be tampered with or backdated. But the Blockchain was first conceptualized in the year 2008 to serve as a public ledger for Bitcoin as already mentioned above. But, it was around the year 2014 when the majority of the tech community started exploring how blockchain technology could be of great help in various strata of life.
As far as security is concerned, the blockchain, by storing the data across its network eliminates the risk that comes when data is centralized. We all are aware that the internet has security problems and almost all of us rely on the username-password thing to protect our identity & assets online. Thus, Blockchain is a security solution that utilizes encryption technology as it lacks centralized points of vulnerability that generally hackers exploit.
File Storage & Shared Economy
Similar to how BitTorrent moves data around the internet, Blockchain utilizes an InterPlanetary File System (IPFS) that gets rid of the need for centralized client-server relationships which is in current use on the web. Imagine an internet made up of completely decentralized websites that has the potential to speed up file transfer and streaming times. Wouldn’t such an improvement just too convenient?
With the success of emerging platforms like Airbnb and Uber, it is quite evident that the sharing economy is the talk of the town. However, it is still an issue that to do things like ordering food, booking a ride, etc we still have an intermediary like Ola cabs, FoodPanda, Zomato, etc. What if these can be skipped and there exist peer-to-peer payments? Now, that is possible through Blockchain; as it opens the door for direct interaction between parties. And it will save your transaction fee too. Isn’t it fabulous?
Who Will Use the Blockchain?
As of now, the financial institutions are offering the strongest use case of Blockchain technology for example in International remittances. According to a report by the World Bank, over $430 billion US estimated in money transfers were sent in 2015. Henceforth, the main advantage of blockchain is that it potentially cuts out the intermediary for these types of transactions. If we would draw an analogy, for making personal computing accessible to the general public; the invention of the Graphical User Interface (GUI) took place in the form of a ‘Desktop.’ Similarly, the most common GUI devised for the blockchain is the so-called ‘Wallet’ applications, which people use to buy things with Bitcoin, and store it along with other cryptocurrencies.