Blockchain is not spelled B-I-T-C-O-I-N
By Mohammad Musharraf on ALTCOIN MAGAZINE
October 31st, 2018 marked the 10th anniversary of Bitcoin and it was celebrated exuberantly across the globe. But the question is, do all of us really understand what the underlying technology — blockchain — is, and how it is different from and much more than just Bitcoin?
Well, before we go deeper into comprehending blockchain, let’s understand what Bitcoin is.
Based on the years' old concept of cryptography, Satoshi Nakamoto (an unidentified individual or group of people) wrote a whitepaper for Bitcoin that was published in 2008. He had successfully created a system that would go on to show the world a financial system that negates the use of all kinds of intermediaries.
Bitcoin has two parts: Bitcoin token and Bitcoin ledger/blockchain.
So, yes, Bitcoin was the first ever blockchain to be developed and put to use along with its own cryptocurrency, Bitcoin. But, in 2013, Vitalik Buterin, set out to invent his own blockchain that would improve the inefficiencies of Bitcoin (the blockchain).
Now that you have a brief idea that blockchain and Bitcoin can be made to sit on two different chairs across the table, let’s delve deeper into understanding blockchain technology and how it can disrupt various industries throughout the world.
If not Bitcoin, what actually is Blockchain?
Well, it’s a chain of blocks, obviously.
These blocks are used to store records and are linked to one another through an immutable encryption technology.
All the blocks that are verified to be added to the blockchain contain three elements: a hash (‘checksum’ in layman terms) of the previous block (except for the parent block), a time stamp, and the transaction data.
But what makes Blockchain so special?
Unlike other ledgers that are used to store data and process transactions — of value or information — blockchain sets itself apart with its three major properties: decentralization (a.k.a distributedness), immutability, and transparency.
The first, most celebrated feature of blockchain is its decentralization, meaning no single entity controls what goes on on the blockchain. It is an anonymous peer-to-peer system that connects the two parties involved in the transaction directly and helps them complete the transaction without fail.
Being decentralized also makes it resistant to any breaking points that could be attacked to edit or delete any form of transaction data. Hence, once a transaction is registered on this distributed ledger, it becomes unalterable. This brings us to the second most important property of blockchain, i.e. its immutability.
Blockchains are public ledgers which means that the system works transparently and registered data can be viewed by the public, however, the identity of the party involved in the transaction might not be discovered.
Why is it so important?
Well, to have a ledger that stores important transaction data highly protected is quite an important thing. And blockchain with its properties — decentralization, immutability, and transparency — does just that. It creates the highest form of security for ledgers. That too without any third party involved in it. Because even they might make mistakes.
The fact that Blockchain negates the involvement of any third parties in all sort of transactions makes it a note-worthy technology. For example, traditional bank transfers, especially for international transactions, take some great deal of time for completion and also cost a considerable amount. On the other hand, blockchain transactions will not only make your transactions more secure and fast but would also cost you a negligible sum of money.
Just so you know, Blockchain is no longer about monetary transactions only. As time is going by, there are a number of other applications of blockchain that are being discovered. The perfection and ease with which blockchain stores all data can be used to disrupt many industries. From agriculture to retail, from shipment to AI, VR and AR, from gaming to sports, blockchain has already set foot to revolutionize the world, “block by block.”
Even more, new possibilities have been unleashed for the blockchain due to the success of Ethereum with practical implementation of smart contracts. Smart contracts are code implemented to certain systems that get activated and perform certain tasks when the encoded conditions within the contract are met. These smart contracts built over blockchain have innumerable use cases. From being implemented for something as basic as automatically switching on and off your room’s AC when the temperature conditions are met to something as important as managing loans, financial bonds, taxation and more, the uses of smart contracts are vast, may be endless.
I hope that you’ve been able to draw a clear line between Blockchain and Bitcoin by now. If you’ve anything to add, do comment below.
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The purpose of ALTCOIN MAGAZINE is to educate the world on crypto and to bring it to the hands and the minds of the masses. This article was written and composed by Mohammad Musharraf on ALTCOIN MAGAZINE.
