Blockchain FAQ – A Guide to Blockchain

What is Blockchain?

Picture a spreadsheet that is duplicated hundreds of times across a network of computers. Then picture that this network is designed to regularly update this spreadsheet – that is the basic understanding of Blockchain. Information held on a Blockchain exists as a shared (continually reconciled) database.  The Blockchain database isn’t stored in any single place, meaning the records it keeps are public and easily verifiable – one obvious benefit. No centralized version of this information exists for a hacker to corrupt – another benefit.  The Blockchain is hosted by millions of computers simultaneously and built in ‘Blocks’ on top of each other.  Once information is added it can’t be amended. So in short, Blockchain is a digital, decentralized ledger that keeps a record of all transactions that take place across a network.

Why is Blockchain technology relevant?

Compared with traditional database technologies and centralised systems, Blockchain implementations can be cheaper and require considerably less IT investment to maintain.  In addition, because of its application in creating resilient, hacker-proof records, lots of initiatives have been proposed for registries using Blockchain. For example, within the Public sector it can affect government-maintained registries e.g. Blockchain-based tracing of donations from donor to recipient to ensure the money goes where it is needed. “Almost every major financial institution in the world is doing Blockchain research at the moment, and 15% of banks are expected to be using Blockchain in 2017.”

What is the history of Blockchain?

The first distributed Blockchain was then conceptualised by Satoshi Nakamoto in 2008 as the core component of the digital currency Bitcoin, where it serves as the public ledger for all transactions.  The words block and chain were used separately in Satoshi Nakamoto's original paper in October 2008, and when the term moved into wider use it was originally block chain, before becoming a single word, Blockchain, by 2016. Although associated with and used by Bitcoin, Blockchain technology will be applied to multiple sectors and industries.

How does Blockchain link to Bitcoin?

The first major Blockchain innovation was Bitcoin, a digital currency experiment. The market cap of Bitcoin now hovers between $10–$20 billion dollars, and is used by millions of people for payments, including a large and growing remittances market. Blockchain for Bitcoin meant that it was the first digital currency to solve the double spending problem, without the use of a trusted authority or central server.  Bitcoin, (the digital asset) is used like other assets in exchange for goods and services. Unlike traditional currencies and assets, Bitcoin is easily portable, divisible, and irreversible. The benefit is that Bitcoin increases system efficiency and enables the provision of financial services at a drastically lower cost, giving users more power and freedom. There is no central intermediary as there is no regulation around Cryptocurrency. 

How will Blockchain affect the world?

So how will Blockchain affect the day to day digital world?  There are so many applications that are attracting significant investment across multiple sectors and that Blockchain could disrupt.  Companies are keen to invest so that they become the disruptor, not the disrupted.

Some Examples include:

  • Financial Services – This is attracting the biggest investments due to the size and scale of opportunity in financial transactions
  • Property: Reducing time and admin costs and also fraud, by keeping records on the Blockchain – which provides an audit trail.
  • Music Streaming: There are several start-ups leveraging Blockchain to change how music will be distributed and shared and how royalties will be paid
  • Voting: Using the Blockchain individual votes can be audited with greater transparency
  • Healthcare: - Patient records could be stored on the Blockchain without the worry about records being changed.
  • Recruitment:  Technojobs have partnered with APPII to introduce Verified Career profiles – your CV can be verified by your Educational Institutions and Employers. Find out more here.

These are just a few of the examples as there are so many sectors where a secure audit trail and records without intermediaries means the Blockchain will be coming!

 

Where can I find out more information on Blockchain?

There is significant information online about Blockchain – some useful resources are as below:

https://en.wikipedia.org/wiki/Blockchain

https://blockgeeks.com/guides/what-is-Blockchain-technology 

 

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