What is blockchain ?

Sagar Gulabani
Jul 24, 2017 · 3 min read

What is all the hype about cryptocurrency and blockchain? Blockchain is one of the technologies that may bring about revolution in the way the internet works. Blockchain is all about decentralising our applications of today. Today an application like Facebook or Google is run by a single organisation. The law of the land is handled by a single entity, the government. All our transactions are handled by a single entity the bank. These applications are highly centralised. The biggest drawback about these applications is that they can be manipulated to the will of those controlling them. Another drawback about them is that they there is no transparency about things like the way our data is handled or the charges that are taken by banks from us. They may change the rules whenever they want at our peril . This may leave us stuck to comply with them because we are too invested in them to let them go.

Blockchain solves the problem by running the application on a decentralised system. A decentralised system is one where the applications are run by the people for the people. All the data lies in a public database and there are rules set to complete the processes. These rules are called smart contracts. There is no way a single entity or organisation can manipulate the rules to their convenience. Since everything works on a public database, there is 100% transparency. Any charges that are taken from you are recorded and can be seen openly and in the public. This can remove a huge amount of red tape bureaucracy.

Bitcoin is based on the blockchain technology. It was the first cryptocurrency. It was launched in January 2009. In April 2010, the value reached $0.03 USD and today the value stands at $2775 USD per bitcoin. The bitcoin is important because it proves the underlying blockchain technology.

Another blockchain based distributed computing platform is Ethereum. What Blockchain did for money, ethereum can do for any possible transaction. Those that provide the resources to run the application are in turn rewarded with Ether, the cryptocurrency for ethereum which can in turn be exchanged for cash.

Another application of blockchain is crowdfunding. Companies like Kickstarter allow the crowd to contribute to a startup and ensure that whatever is promised will be given to them. It keeps the money in escrow and returns the money if whatever was promised is not given. However they take a lot of charges. Blockchain allows startups to come up with their own tokens and sell those tokens for money. These tokens represent share in the company and are immutable and in the public. These remove the middlemen like Kickstarter.

Blockchain applications still are in their infancy and are yet to mature. It is assumed that the blockchain technology will likely change the world in a way the internet did in the 1990s.

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