If you have been following the latest technology trend in investing, cryptocurrency, banking or financial related news, you will have heard of the term ‘blockchain’. This is because it is the system behind the Bitcoin network. If you haven’t been following the latest technology trend, don’t worry, we will dive into the topic of blockchain.
What is blockchain?
While most people think of ‘blockchain’ as just a term related to crypto, it is actually much larger than that. A blockchain is, within the simplest of terms, a time-stamped series of immutable records of information. A cluster of computers not owned by any single entity manages this information. Linked together cryptographic principles secure each of these blocks of data.
Why is blockchain so popular?
- Enters a new transaction
- Peer-to-peer computers scattered across the world receive the network
- The network of computers then solves equations to confirm the validity of the transaction
- Once confirmed to be legitimate transactions, they are clustered together in blocks
- These blocks chain together to create a long history of all transactions that are permanent
- The transaction is complete
The goal of blockchain
The goal of blockchain is to permit the recording and distribution of digital information, but not edited. Blockchain technology was first outlined in 1991 by Stuart Haber and W. Scott Stornetta, two researchers who wanted to implement a system where document timestamps couldn’t be tampered with. But it wasn’t until almost 20 years later, with the launch of Bitcoin in January 2009, that blockchain had its first real-world application.
Currently, there are humongous types of blockchain-based projects looking to implement blockchain in ways to assist society aside from just recording transactions. One idea is that employing blockchain as some way to choose democratic elections. The character of blockchain’s immutability implies that fraudulent voting would become way more difficult to occur.
Advantages of blockchain
- Cost reductions
- Efficient transactions
- High chain accuracy
- Private and secure transactions
Disadvantages of blockchain
- Inefficient speed
- Technological cost
- Potential illegal activities
- Government regulations
The future of blockchain
With many practical applications for the technology already being implemented and explored, blockchain is finally making a reputation for itself at age twenty-seven, in no small part due to bitcoin and cryptocurrency. Blockchain stands to form business and government operations more secure, efficient, accurate and cheap with fewer middlemen. Whatever it will be used for in it’s the 30s will be much more advanced and futuristic.
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