Blockchain is a fairly new and innovative way of storing and distributing data in a secure and transparent manner.
According to Investopedia, blockchain technology was first created in 1991, by Stuart Haber and W. Scott Stornetta, two mathematicians who wanted to implement a system where document timestamps could not be manipulated.
However, it was mostly unused, until it was adapted by Satoshi Nakamoto in 2009 to create the digital cryptocurrency Bitcoin. By the way, no one currently knows the true identity of Satoshi Nakamoto.
In this video report, we will discuss blockchain basics: what blockchain is, how blockchain works, its benefits and the future!
Let’s first define what the blockchain is.
The blockchain can be best described as a digital ledger, or record of all cryptocurrency transactions. It is constantly growing, as “completed” blocks are added to it, with a new set of recordings. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. For example, cryptocurrencies such as Bitcoin, use the blockchain to differentiate legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.
Now let’s talk about how blockchain is used.
Lets say, someone wants to send bitcoins. To do that, they need to broadcast the transaction to the entire network. Blockchain then verifies whether the sender has enough bitcoins available to make the payment and whether the recipient has an address that corresponds to the being sent. If everything checks out, blockchain adds the transaction to a new block and broadcasts it to the network. Miners, a group of individuals, then compete to solve a complex cryptographic problem in order to add the block to the blockchain. When one of them succeeds, they are rewarded with newly-created bitcoins and transaction fees.
When a new block is added to blockchain, it’s permanently sealed off from editing or reversing any of its transactions. This makes blockchain incredibly secure, since any changes would require overpowering the entire network.
Currently, blockchain is being used in more ways than just bitcoin. It can be used for healthcare transactions, record keeping of all kinds, and even voting! Companies like IBM, are looking into blockchain, for supply chain management, improving security with cloud services, and identifying counterfeit products, throughout different stages of an item’s life cycle. Blockchain has also been tested by companies like Walmart, who want to track their food from farm to store shelf, using distributed ledger technology.
The Australian stock market, which announced they’d be using blockchain to settle transactions.
Another financial example is a company called Abra, a money transfer platform that lets people working abroad send money home in 54 different currencies.
The money transfers are faster and cheaper than a traditional service, which charges an average of 7% of the amount of money sent, according to the World Bank.
The World Wildlife Fund, and three other companies that are working together to sustainably source tuna in the Pacific Ocean. These companies are ConsenSys, a blockchain company, TraSeable, an information technology firm, and SeaQuest Fiji, a tuna fishing and processing company. The four together are utilizing blockchain to track where, when, and how the tuna are caught and sold.
So, what makes blockchain so secure? That’s a complicated question, but part of the answer has to do with the blockchain’s distributed network. Everyone in the blockchain network owns a copy of the entire blockchain. This makes it incredibly difficult to hack, because you would need to simultaneously hack every computer on the blockchain network in order to change a record.
Another security feature of blockchain is its cryptography. Every time someone wants to add a new block to the blockchain, that block is cryptographically secured. This means that it can’t be changed without being detected.
So, what’s next for blockchain? The sky’s the limit! Exciting developments are already happening in the world of blockchain technology. And they are only going to continue apace!
Some growing usage examples would be jewelry companies, which hope to assure customers that their diamonds are not from a place where their purchase might finance war.
Blockchain could also be useful in property records. Storing land records on a blockchain might cut way down on costly title research and insurance, and in politically unstable areas, it could prove ownership.
The healthcare field is another area where blockchain records would prove useful. Your medical history could be securely stored and controlled by you rather than by your doctor.
Furthermore, blockchain technology could create tamper-proof election returns. The advantages of this should be fairly obvious!
However, despite all the potential, we’re still in the early days of blockchain technology. Three key components need to be resolved before it goes mainstream.
First component is the energy use. Because it requires a lot of computing power to check the transactions and add them to a blockchain, verifying them is energy-intensive.
Second component is the processing speed. The sheer amount of calculations slows down the computer’s processing speed. Researchers are now working on ways to simplify it and increase the number of transactions performed.
And the third component is interoperability across blockchains. The many blockchains now don’t communicate with one another. The next generation of blockchain innovation may need to address this issue.
I hope this coverage was useful for you! Kindly share your blockchain experiences with us! Also, spread the word about Vezoverse TV, a digital channel, where reporters are presented as 3D characters like me!
I am Lesl Krestov, a digital reporter from Vezoverse TV, Vezoverse City, Vezoverse.