What is Blockchain and How Does it Work?
Blockchains have become incredibly popular, thanks to its genius creator Satoshi Nakamato. Blockchains are constantly evolving and have the potential to create even more exciting developments. However, a question that still remains unanswered for many people is — How exactly does blockchain work?
Starting with the very basics, the blocks within a “blockchain” can be simply explained as a growing record of data exchanges. Each block within the chain contains data and a “hash”. A hash is a unique code that identifies a block and all of the data stored on it.
Once the first block has been created, further blocks will be connected to the first block and any blocks that follow it. This then creates a “blockchain”. Essentially a chain of blocks…except the term is reversed.
Each time a new block is added to the chain, a new hash is created for the block. The new block will also contain the hash of the previous block. This makes the data contained within a blockchain very easy to trace.
One of many reasons why people are excited about blockchain technology is the fact that a higher level of security is provided when sharing data. As it’s much easier to identify if a block (source of data) has been tampered with. If a block in the chain is altered, the block’s hash is also changed, this then means the block is no longer the same, which makes it easier for users to spot data changes.
Another feature of blockchain that sets it apart from other ways of sharing data is its “peer to peer network” instead of the usual centralised network. A peer to peer distribution method means that anyone that joins the network gets a full copy of the blockchain and this is used to confirm the data is valid. When a new block is created everyone in the network is sent the new block, and everyone must then verify the block as being valid before it can be added to the blockchain.
This makes tampering with a block and then getting it added to the blockchain very difficult. So blockchains give users a lot of security and definitely makes it harder for those pesky hackers to tamper with the data. We are now seeing smarter ways of sharing data over the internet and blockchain technology is being used across many industries including finance, the food industry, transport, gaming and fashion.
In the US, large food corporates such as Walmart have already phsaed in blockchain technology to better track food sources. In 2006, 199 people were affected by a major E-Coli outbreak across multiple states in the US. The common denominator was spinach. It took the Food and Drug Administration (FDA) 2 entire weeks to find the source of the contaminated spinach, for 2 weeks there was no spinach available in the market. Farmers suffered. And sadly 2 people passed away, including an infant.
This raised a huge issue in many food industries lack of “trace-ability” with their food sources. Using blockchain technology allows for the entire process of an item to be tracked from the farm, to where it’s being processed, to the distribution center and finally to the retail store. This of course requires a lot of work but there are many advantages to food stores using blockchain technology, three being:
- Greatly enhancing food safety.
- Ensuring the food is fresher, people feel pressured to only send fresh food in an open system.
- Less chance of food waste since every item of food is accounted for.
What have you learned about Blockchain today? Let us know below.
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