What is blockchain?
Blockchain is defined by Google as
i.e in simple words, Blockchain is a glorified shared publicly shared spreadsheet stored across thousands of computers which continuously update the spreadsheet simultaneously across all the computers
Here the thousands of computers are said to form a network and this type of decentralised method of transaction is called peer to peer transaction
To understand better look at the following transaction:
- You request a transaction
- This request is shared with the network of computers known as nodes
- This network of nodes validate your transaction through in-inbuilt authentication, authorization and security algorithms
- Once verified this transaction is combined with all the other transactions in the virtual spreadsheet to create a new block of data in the so-called ledger
- This block is added to the existing blockchain
- The transaction is complete and the new blockchain contains the data of the latest transaction
The term transaction here may involve contracts, records, cryptocurrency or other information.
To show how revolutionary it is, consider the following example:
In the olden days, before Microsoft office 365, if multiple people had to edit a document then it had to be sent back and forth and whilst one person was editing others will be locked out of the system. Databases to date behave the same way i.e 2 data owners cannot work on a data simultaneously.What blockchain does is that it allows for data to be reconciled simultaneously i.e it allows 2 people to work on a document simultaneously
How does Blockchain benefit me?
The bitcoin network is always in consensus i.e it automatically checks itself every X minutes to make sure that all the blocks are in sync. This leads to a creation of a self-auditing ecosystem with increased transparency and most importantly it is owned by no one. But, how does it benefit a individual?
In the words of Vitalik Buterin, inventor of Ethereum
“Blockchain solves the problem of manipulation. When I speak about it in the West, people say they trust Google, Facebook, or their banks. But the rest of the world doesn’t trust organizations and corporations that much — I mean Africa, India, the Eastern Europe, or Russia. It’s not about the places where people are really rich. Blockchain’s opportunities are the highest in the countries that haven’t reached that level yet.”
How will Blockchain help enterprises?
Blockchain will help enterprises create the internet of value exchange i.e it will behave as a security system which will allow for securing contracts, records, physical & digital property, equities, bonds and a whole group of applications which we haven’t yet envisioned
As Bill Gates once said “We always overestimate the change that will occur in
“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.”
Blockchains are the future. According to VentureScanner.com there are over 800 new startups in the global Bitcoin ‘ecosystem’ and have collectively raised over 1 billion dollars in funding. Bitcoins are just the first step in the world of blockchains. Its future is unpredictable but sure as hell exciting.