“Blockchain is the Future”, They Say. But Do You Understand It?
You may have heard the term “Blockchain” thrown around and ignored as another fad, as slang or lingo, or even technical gibberish. Here is your beginner’s guide to Blockchain, in plain English.
If you’re like me a year ago, any mention of the word would raise immediate question marks — and then you admit defeat of your lack of knowledge and find yourself Googling one of the most-searched keywords in this topic: “What is blockchain?”
And then you’re directed to a long list of technical articles that outline new projects, ICO’s and advances in innovation without taking the time to explain this “future” technology in plain English.
What Is A Block?
A block is a record of new transactions. A transaction can be something bought or sold, but it can be a lot of other things, too. File storage, smart contracts, medical records, a record of how much energy you own, a recorded conversation — the list is endless. Basically, each block is a record of digital information. [1]
So, What Is Blockchain?
“Blockchain is a distributed digital public ledger with the potential to dramatically impact all industries that rely on trust or record-keeping/authentication.” says Scot Cohen, CEO of Bitzumi. “It provides the foundation for secure peer-to-peer digitally based transactions which are publicly viewable.”
New digital information gives us a new block, which gets attached to the old block, or chained together. That chain is a special kind of programming called a “hash function.”
Think of a hash function as a tool. It takes an input, does a lot of complex work, and produces an output. In this case, the input is a new record of transaction. (A new block.) The output is the chain, which links the new block to the old block in a way that cannot be changed, erased, or reversed. It’s like a one-way street. That is different than, say, encryption, which can be encrypted and decrypted, more like a two-way street. [1]
A blockchain (your digital information index) is stored on multiple computers all over the web. Each computer is called a node. Together, they form a peer-to-peer network. When someone requests a transaction, which is the same as saying someone requests a change to the digital information index, all those nodes get busy verifying it. Once it’s been carefully verified by the peer-to-peer network, the transaction is complete and added to the chain. [1]
Blockchain and Its Advantages
Blockchain technology has several key advantages, the biggest one being:
Decentralization/Disintermediation
The core value of a blockchain is that it enables a database to be directly shared without a central authoritative group or location. With blockchains, we can now replace these third-party organizations with a distributed database, locked down by clever cryptography. “Like so much that has come before, they leverage the ever-increasing capacity of computer systems to provide a new way of replacing humans with code. And once it’s been written and debugged, code tends to be an awful lot cheaper” (Gideon Greenspan). [3]
Other Advantages
- The transaction record is viewable by anyone on the network, so it’s fully transparent, sometimes called a “public ledger”
- Your personal information is still protected
- The information log is encrypted, so the content is secure
- Lower transactions costs because third party intermediaries and overhead costs for exchanging assets are eliminated.
What Is The Best Way To Understand Blockchain?
→ Attend conferences! :)
Conferences are a fantastic way for like-minded enthusiasts to learn more, engage and network, and get the first look of the newest trends in the industry. Your team at Beyond Blocks just wrapped up an incredible two-day blockchain conference by way of Summit Tokyo 2018, which featured a long list of world-class thought-leaders representing nearly every corner of the space, addressing relevant industry topics such as ‘ICO vs. VC’, Real World Applications of the Blockchain, The Next Generation of ICOs and Protocols of the Future. We’ll be announcing our next conference shortly — stay tuned!
The new advances in Blockchain technology are captivating, but unfortunately fenced by a lot of hype and cloaked in blurred rambling.
As the industry continues to grow, it is important to learn about the technology and understand how it works. While blockchain solutions for the average consumer might not be here just yet, the widespread possibilities of its use cases means blockchain should be sticking around for a while.
References:
[1] Inc.com — Blockchain Is the Future, But It’s Confusing. Here’s an Explanation in Plain English
[2] Forbes.com — A Complete Beginner’s Guide To Blockchain
[3] MultiChain.com — Blockchains vs Centralized Databases
Interesting, right? Connect with us and keep the conversation going!
Official Website Facebook Twitter Instagram
The opinions expressed here by Beyond Blocks writers are their own, not those of Beyond Blocks.
