What Is Blockchain & What Should We Know About It
“THE BLOCKCHAIN: TRUSTWORTHY TRANSACTIONS IN A TRUSTLESS WORLD”
We may all have heard the term Blockchain, but what exactly does it mean and what should we know about it?
Essentially, Blockchain is ‘the structure of data that represents a financial ledger entry, or a record of a transaction.’ This new network that decentralizes trade using a peer-to-peer (p2p) network (can be public or private) as a way of communication. What this means is that we can trade with anyone all over the world without needing to go through a middleman - banks are a prime example.
Additionally, all trades are done on a decentralized network — no one central database that holds all vital information. Instead it is spread out over millions to be verified on this P2P platform. Transactions are guaranteed, safe, efficient and secure.
How does Blockchain work?
There is a network of computers all over the world that all have the same history of all transactions. If another trade wants to be validated, it needs to be done so by the entire network — millions and millions of computers — which is referred to as a distributed network.
Using cryptography and cryptographic keys, ‘blockchain technology is to create a secure digital identity reference. Identity is based on the possession of a combination of private and public cryptographic keys.’ Therefore, a combination of these keys is seen as a form of consent using what we would call a digital signature.
A distributed network of computers works to verify and authenticate the digital signature in order for a transaction to move forward. This block of code contains a digital signature and other relevant information. This information is then broadcast to all the millions of computers in the network, and a software code is run on each computer, which is called a node. Only if all nodes come to the same conclusion will another line of code be written and once there is more than one block you have produced a Blockchain.
Therefore, Blockchain is a transparent, persistent, public, append-only ledger. Data can be added but the past cannot be changed and only through 100% consensus can new block be produced. Blockchain relies on the challenge of figuring out the code in order to authorize a new transaction. All nodes are working to be the first to ‘crack the code’. And when the code is finally cracked, the new transaction becomes a new block. And the individual/computer who solves each new block is called a miner and as of now their reward is in the form of cryptocurrency… hence, the challenge to produce a result. Because all nodes have to agree, no one individual can solve the code, making it extremely unlikely for fraud to take place.
Why is Blockchain an essential part of InstantSponsor?
Because Blockchain is decentralized, it can reduce the risk of fraud, providing rights holders as well as brands with an operating system that is not only secure and trustworthy but also transparent. The use of cryptocurrency and cryptography allows for an operating system that securely manages payments and verifies transactions without the need for a bank, bank fees, or exchange rates. Blockchain technology could potentially transform the sports and entertainment industry ‘given its ability to mitigate risk, create new sources of value and enable new secure transfers of information.’
