Blockchain is another word that makes a stunning career in the modern world. Despite this, the full understanding of the importance of this new technology is rather low. We will try to remedy this with this text!
The word “blockchain” is most often used in the context of Bitcoin and other cryptocurrencies. There is no wonder, because this technology is the basis for the operation of these digital currencies. So what is blockchain?
Blockchain is simply a database. However, it differs from other such solutions by important features – decentralization and immutability. In practice, this means that the information that is contained in the block network cannot be changed. This is due to this decentralization. A copy of this database can be owned by an infinitely large number of people who also somehow supervise its content.
How it’s working?
To even more easily describe how blockchain works, we’ll use a short story. Imagine meeting a new person. This one wants to sell you a unique release of your favorite band’s CD. It offers a fairly good price, only 20 USD. What are you doing? Of course you agree immediately! Due to the fact that you just met, you don’t fully trust each other yet. This is understandable and nothing to be ashamed of! To secure each other, you save the transaction on sheets of paper. The transaction was successful, you are satisfied. Why not continue this relationship? It turns out that you have a great book that you want to sell. Your new friend wants to buy it from you. Nothing easier! You are entering into a new transaction. You sell your companion a book for $ 10. Save everything on your pages again.
Business is booming, so another credible culture connoisseur wants to join your reliable group of record and book traders. You don’t mind, but your only condition is that you comply with your transaction rules. The new colleague must first rewrite your previous transactions on his card, which additionally protects them and gives credibility. If he wants to trade with you, he also agrees that every transaction will be recorded by him, you and your first partner. Importantly, even if one of you does not take part in the transaction (e.g. you are only watching the trade between person number 1 and person number 2), you still have to save the history of this trade. After some time, more people join the fun. In this way, a huge, publicly accessible social register is created. Thanks to this, any manipulation attempts can be easily detected, and those who cheat will not be allowed into your company at all.
Blockchain is such a thing. A gigantic, social database, whose main advantage is that the third trusted party is the entire community, not one entity.
Why would the world need blockchain?
Well, it sounds fascinating, but why the world of blockchain? It turns out that the mechanism described above can be used in many industries. Imagine a system of voting for political parties based on something like this. All dictatorial regimes would have quite a nut to crack. The introduction of such technology on the real estate market – and basing it on e.g. land and mortgage registers – would speed up transactions. Creating such a global and secure medical research database would improve the fight against many diseases. The automotive market is already using similar ideas to save the results of analyzes on the development of self-propelled cars. It is not difficult to imagine using blockchain on the content distribution market, e.g. when selling music or movies directly by their creators, bypassing the label.
However, the above examples are just the tip of the iceberg. Today, we are only at the beginning of blockchain development, in the 1990s for the Internet. Interest in this technology today can also be a great investment idea. After all, in the case of modern solutions, those who choose the earliest benefit the most.