Blockchain, A Brief Introduction…

Upon hearing about blockchain technology, I was immediately intrigued. What is this disruptive Godsend I have always dreamt about but never could even begin to fathom???!!!! Since my introduction to the technology, I have spent many hours pouring over articles, videos, and forums trying to figure out exactly what this thing is. Unfortunately, information on the subject seems to be very fragmented and/or repetitive, making the research of blockchain quite a struggle. For my first blog post, I have decided to put together a brief summation of my efforts in understanding what, exactly, this thing is.

What is blockchain?

Blockchain is the technology behind cryptocurrency, like BitCoin. It is a REVOLUTION in data transacting that is sure to change the way society has come to operate. Basically, the way data is transacted today is through a middleman, such as a server, where users communicate with each other through its framework. Blockchain decentralizes this process. Every user is able to transact directly with another user in the form of smart contracts. These smart contracts allow users to transfer any data of value, be it money or legal contract. Deleting the middleman yields power back into the hands of the people, allowing users to make transactions cheaper, more secure, and more efficient. Safety and security of data is ensured by the built-in mechanisms of the blockchain protocol, its algorithmic state of being.

Think about Microsoft Word versus Google Docs. If you are working with someone on any body of text and you’re using a Word document, you need to save and send the document back and forth to each other, poring over the document constantly making sure you have the most up to date copy, and that it includes the latest iterations of text. With Google Docs, you can work with another person simultaneously with no worries about files matching as you’re both working on the same iteration of the body of text.

Who made it?

Blockchain was developed with the intention of securely conducting monetary transactions over the internet using a cryptocurrency called BitCoin. Since it’s development in 2008, by a person or group known by the name “Satoshi Nakamoto,” blockchain has further been developed to allow for use outside just the cryptocurrency world. Currencies like Ethereum have a blockchain designed to be more diverse in its application, allowing for users to conduct any sort of contractual agreement without any interference or barrier.

Where does blockchain reside?

One of the beautiful aspects of blockchain technology is that it does not reside in a single space. When data lies in a single space, it is vulnerable to attack by hackers who could corrupt the data and cause irreversible damage. Blockchain technology lives on a network of computers known as nodes. These nodes all hold a copy of the contract, and they are constantly communicating with other nodes on the network to make sure that their copies of the ledger are up to date. Transactions are instant and secure, going directly to the other party, rather than through a central server or database. Every time a group of transactions are verified by the network, they are placed in a block and pushed onto the back of the chain. Whenever a block is formed and added to the chain, it cannot be changed. Also, all transactions are public, but users are anonymized with the use of a public key.

In the case of BitCoin, users on the network are known as miners. Their nodes are racing to complete complex math problems in order to find the magic number that will unlock the reward of BitCoin for their efforts. These complex algorithms are verifying the transactions that are occurring, and every ten minutes when the new block is created, the rewards make their way to the miners who were able to complete the work to hash together a new block.

Why was blockchain made?

One presumption is that BitCoin was created because central banks were seen as too powerful, essential having a monopoly on the control of the money supply. With centralized control of a money supply, consumers become at risk to manipulation of the market by the controller of the supply. In an era of bank scandals and alternative facts, blockchain’s importance is destined to become more apparent. Additionally, the technology has shown promise in all matters of transaction where data of value needs to be recorded. Think about property transactions in countries where other systems of recording hold no reliability, or developing a legal contract with lots of negotiation between parties, or even for consumers who want to check up on the claims of corporations by following their supply chain back to where they source their goods.

I see blockchain technology as a similar entity to internet in the 90’s. Society can benefit greatly from its many uses and the promises of decentralization of data can lead to a better world.