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What is Blockchain?
A blockchain is a continuously increasing group of records (blocks), which are connected together using cryptography. Each block contains a cryptographic hash of the previous block, all the way down to the original block that was mined on the network. They also contain a timestamp of when the block was created and transactional data.
Due to its design, a blockchain is resistant to retroactive attempts to modify its data. It is a distributed ledger, which is operated on a peer-to-peer network which will generally, collectively adhere to coded rules and regulations for nodal communication and the verification of new blocks.
Once information has been recorded on the blockchain, the data on that block cannot be altered, without every single subsequent block being amended also. This requires an overall consensus from other users of the blockchain. Despite the fact that blockchains can be altered in theory, they can be classified as secure by design and are an example of a distributed network that has high Byzantine fault tolerance.
Due to this, a decentralized consensus has been achieved by using blockchain technology.
The first blockchain was created by an entity called Satoshi Nakamoto in 2008, to act as the ledger of transactions for the cryptocurrency, bitcoin. Nakamoto’s creation of blockchain had solved a long-standing digital currency problem of double-spending, without the use of a network administrator or a centralized server.
Blockchain platforms which are accessible to the public are the main platform for cryptocurrencies. There have also been suggestions that private blockchains could be effectively utilized by businesses.
Blockchain can also be used to generate smart contracts that could be either fully, or, slightly completed and enforced without the requirement of human interaction. The main goal of smart contracts is to create a system where escrow can be automated. Despite there being a lot of positives to smart contracts, we have yet to see any viable systems emerge for this type of use.
Many organizations that form part of the banking and financial industries are also beginning to implement distributed ledgers as part of their operations. The main reason for their interest in this technology is that it can help to speed up administrative functions within the bank and therefore can increase their efficiency and reduce costs. UBS, a well-known world bank has developed research labs that will seek to integrate this technology with their own systems.
Blockchain technology can be used to create a permanent and completely open public ledger, that can be used to keep track of sales and the use of digital content, so that content creators, such as musicians can be paid more efficiently. IBM has in fact partnered with ASCAP and PRS For Music, to try and develop musical distribution technologies based on blockchain technology.
The blockchain is constantly evolving and as more time passes, the technology itself will begin to improve. These improvements will help to revolutionize the industry. There are many who believe that at a certain point in the future, blockchain technology will be widespread across numerous businesses and will be very commonly used by the general public.