Blockchain Technology

Ever heard of blockchain? The latest technological innovation that is slowly revolutionising the way we work on the internet?

Well, you are forgiven if you have never come across it in your life. Unlike household buzzwords like “cloud” or “the Internet of Things”, blockchain is less known because we as consumers do not interact with it directly. Blockchain may not sound useful, but in a world which relies heavily on the internet, it can be the answer to a very important question: How do we ensure security and trust what happens online?

In a nutshell, blockchain is a distributed database that maintains a shared list of records, which are called blocks. Each block is encrypted and contains the history of every block that came before it, and everyone on the network can see these chain of blocks. Everyone on the network must approve an exchange before it can be verified and recorded.

To put it in a less technical way, imagine you returning your friend money in real life. Blockchain is like having a hundred of your friends standing around you watching you hand that money over to your friend, and they are all witnesses to this transaction. They all agree that you have indeed handed the money over to your friend and that all the details of the transaction are right, such as the amount. Your friend cannot say that you have not paid because there are other witnesses that can attest that you paid.

Hence, similarly online, when you send money to your friend, a new line item detailing this transaction is create in the blockchain database (the shared list of records). This line item gets sent to hundreds of other computers (which are your “friends” who witness this transaction) and gets a copy of the record. These computers confirm that everything about this transaction is legitimate and approves it, just like how your friends agree that you have indeed sent over the money to your friend. Everyone has to approve it, and once done, the transaction goes through and is recorded in the database. In this way, blockchain provides a transparent and indelible database of transactions, because the blockchain is kept public and easily verified by anyone, there is no centralized version of the blockchain that can be corrupted by a hacker.

What is exciting about blockchain is that it has the potential to be applied to anything that happens online besides money transactions. It can track exchange of goods, property, music sharing, diamond sales and so on. In the future, it can even be applied to cloud storage, create smart contracts and for voting:

Cloud Storage — Currently, cloud storage services are centralized and users must trust a single storage provider. However, with blockchain technology, it decreases reliance on a single provider and you can rent multiple locations to store your data. Your data is safer this way as it cannot be changed without approval from hundreds of other “witnesses”. Having your data in one storage location makes it easy for hackers to corrupt your data as there are no other “witnesses” that can stop the change before it is implemented.

Smart contracts — Rather than trusting a single central authority for implementing contracts, blockchain can be used to carry out the contracts as a a “3rd party executor”. For example, if two people want to exchange $100 under certain conditions and timeframe, these details can be programmed into a smart contract. Blockchain technology can then be applied to ensure these contracts are not meddled with (since there are hundreds of “witnesses” to ensure this does not happen), and once the conditions are met, the funds will be released to the rightful parties.

Voting — Blockchain can ensure that a vote is transmitted successfully while remaining anonymous to the world. Votes cannot be changed due to the security of the Blockchain records. As a result, electoral processes can be moved online in the future.

Blockchain technology is slowly but surely changing the way we do things on the internet. The next few years will mean more experiments and application of this technology to society, and investors as well as business owners should watch out for these blockchain developments that could provide more opportunities in the future.

Blockchain technology is slowly but surely changing the way we do things on the internet. The next few years will mean more experiments and application of this technology to society, and investors as well as business owners should watch out for these blockchain developments that could provide more opportunities in the future.

By Esther Goh, Writer at 94
Originally published on
Ninetyfour.sg

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