If you’re interested in cryptocurrency like Bitcoin, or just innovative technologies in general, you’ve probably stumbled across the term ‘blockchain’ on more than one occasion. Blockchain technology is effectively the technology or system that allows for Bitcoin to be as secure a currency as it is.
That security is guaranteed through the way that blockchain transactions are executed, and explaining that execution process requires a little bit of additional detail.
Here is an explanation by Deloitte on the functional process behind blockchain that gives an overview of how the transactions are done:
“You (a “node”) have a file of transactions on your computer (a “ledger”). Two government accountants (let’s call them “miners”) have the same file on theirs (so it’s “distributed”). As you make a transaction, your computer sends an e-mail to each accountant to inform them.
Each accountant rushes to be the first to check whether you can afford it (and be paid their salary “Bitcoins”). The first to check and validate hits “REPLY ALL”, attaching their logic for verifying the transaction (“Proof of Work”). If the other accountant agrees, everyone updates their file…
This concept is enabled by “Blockchain” technology.“
The reason why this technology makes sense for a currency is because the information about transactions is distributed (making it more secure because it ‘exists’ in multiple locations), transparent (because it’s recorded by several entities and can be publicly available), and also traceable (since you can check the history of transactions or movements of a something like a Bitcoin).
While its initial implementation has been in finance and currency, the concept of blockchain technology is relevant in any interaction where visibility, traceability, and transparency can improve the quality of that interaction.
The intriguing and exciting thing about blockchain implementation is that we probably haven’t imagined even a tenth of the different ways in which it can improve things we already do. Anything from voting to administrative procedures could potentially be improved by using some form of blockchain technology within the process .
You may be tired of hearing about it already, thinking it’s just some buzzword that’ll be replaced in the next few months, but because of its versatility blockchain probably isn’t going anywhere soon!
Blockchain technology is here to stay, and if you’re looking to incorporate it into your own business, game-changing application or software, get in touch with My Online Presence, who can give you professional advice and solutions!