What is Blockchain Technology?
As blockchain technology moves mainstream, many wonder what exactly this is.
Blockchains are a public ledger on a decentralized network. In other words, Blockchain technology keeps a public record of information alterable by no individual.
Broken apart into two parts:
Block – Information or data container. “blocks” store various forms of data. Not actually a block, blocks can be thought of as “chunks” of data.
Chain – Backbone linking “blocks” to the blockchain. Maintains order and fluidity of information.
Blockchain Deciphered
The Google Docs analogy by William Mougayar effectively explains blockchain technology.
In this analogy Mougayar compares Microsoft Word and Google Docs. Multiple users working on a document is unreliable and inefficient. Users have to send documents back and forth if edits need to be made. Furthermore, ensuring that the latest version is being edited is crucial.
On the other hand, Google Docs allows multiple users to simultaneously edit the most current version. Edits are public and view-able by all users, promoting transparency.
Blockchain technology works like Google Docs. Instead of a shared document, blockchains are a shared ledger, hosting and recording up to date information. Changes are transparent and viewable by everyone. In addition, blockchains prevent unknown changes as changes must be verified by a majority.
In a nutshell, using a shared platform, updating instantly for all users, is vastly more beneficial for a myriad of use cases.
Blockchain Technology Uses
Blockchain technology is still in its infancy, however there are many current applications that rely on this technology.
Cryptocurrencies, Bitcoin included, are a mainstream blockchain technology example. Bitcoin uses a blockchain to record transactions and store them for anyone to view. We covered how Bitcoin transactions work here. In short, transactions take place on the Bitcoin blockchain.
Taking advantage of potential applications, many altcoin projects are developing promising solutions. Waltonchain (WTC) plans to combine RFID and blockchain to enable seamless product tracking. In doing so, clients will be able to track products throughout the supply chain proving as a competitor to centralized rivals.
Smart contacts also rely on decentralized ledgers to store and verify authenticity. Smart contracts are one of the many applications that have many use cases in itself. We covered smart contracts here.
Final Thoughts
Blockchain technology is still in its infancy. This technology has shown promising results and numerous use cases. Moreover, as development progresses, new advancements in the field are made everyday. In conclusion, this new wave of development will make a considerable impact towards the international community.
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