Explain Like I’m Five: Blockchain pt.2
A series on simplifying complicated technology
If you have a hard time defining what a blockchain is, check out the first part of this post where the foundations of blockchain technology are described; click here.
Blockchain Safeguarding
Blockchain technology is naturally cross-referenced and decentralized; making it a considerably safe method for collecting, storing, and tracking data. Let’s look into it.
Cross-Referencing
One of the best ways that blockchain technology is safeguarded, is cross-referencing.
To understand this, you should know that there are several copies (known as nodes) of each blockchain that exist. By several, I mean thousands. The more nodes a blockchain has, the more secure it is from potential hacks.
Each time a new block is ready to get added to the chain, every node receives a copy of the new block.
Only when the majority of the nodes (at least 51%) verify that the new block has the correct reference to the previous block, the new block is accepted and added to the chain.
Since there are usually thousands of nodes (or copies) of a blockchain, cross-referencing is a great safety feature. If someone wanted to tamper with a block, they would need to tamper with at least 51% of the thousands of copies to be successful.
Should a copy stand out as inconsistent, the entire node or copy is disregarded and will no longer be considered for cross-referencing or for adding new blocks — essentially rendering the hacked node useless.
Decentralization
Another great safeguarding measure that blockchain technology is equipped with, is that it is decentralized. This means that each of the nodes or copies of the blockchain are in a different location on a digital network.
Should the nodes be centrally located, then this leaves the data vulnerable; both to attacks and to the servers hosting the data. The latter can be dangerous in the instances that the location hosting the servers burns down or cannot be accessed for any reason.
With blockchain technology, in the event that a single server was destroyed or rejected, there are still thousands of nodes that exist and can be used for cross-referencing.
For a hack on the blockchain to be successful, a significant amount of computational power is needed to find the various locations of the blockchain nodes and then to simultaneously change the nodes with the same information at the same time.
Since blockchains are constantly updated within minutes, this makes it nearly impossible to penetrate and change any data without quickly getting caught, causing the entire blockchain that was hacked rejected for future cross-referencing or receiving additional data.
Blockchain Use Cases
Blockchain technology, in essence, is just a safe way of storing and keeping track of data.
Because Bitcoin has been the first real use case for blockchain, it’s not uncommon to see people associate the two as synonymous. Whilst Bitcoin is built on a blockchain, blockchain technology has so much more utility than just in the crypto space.
Here are some blockchain use cases that I’m personally very excited about.
- Completing cross-border payment transactions is safer, faster, and cheaper using blockchain technology.
- Storing and tracking patient medical histories on the blockchain significantly reduces the chances of human errors.
- By using blockchain technology, it is now possible to keep track of music, art, and all forms of digital content; supporting artists and creators fairly.
That’s just three examples in very different industries of how blockchain technology can be leveraged to make our lives better without having to rely on or pay a governing body.
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