Put simply – Blockchain is a public ledger that lives on computers across the world. If any one node that runs this blockchain goes down, the other nodes are still available. This is exactly how the Internet works currently. Data, that gets moved from one user to another in the form of a transaction, is recorded as a “block” and is added to the chain (or the public ledger if you will) which is then distributed to other nodes and set in stone forever. Data in this case can be anything, a BitCoin Cryptocurrency, a string of text, literally anything. The only way to change a block would be to control every single node running the blockchain which makes it nearly impossible to compromise or corrupt these data transactions. For example, imagine you hailed an Uber. Instead of relying on Uber to handle the transaction and get a copy of all your data in order to pay the driver, with a blockchain technology you could directly pay your driver without needing to trust any 3rd party. The transaction, in this case money, would be added to the blockchain and replicated across all the nodes as a record of this transaction having taken place. This provides benefits in that you don’t have to rely on a 3rd party with your information, direct payment from person to person means that there are no fee’s to conduct a transaction, and you have a public record of your payment. And since it’s distributed there is no opportunity for data manipulation.
How Does Blockchain Work?
This technology allows for unparalleled transparency over an individual trade by making the accounting in any given transaction reviewable, and therefore public. This is because digital information is distributed instead of copied. This ledger is just a list of records, or blocks, which are linked and secured using cryptography. This allows for public and verifiable transactions to happen between two parties. The reason that this technology is so revolutionary is that there is no single location where information is stored – meaning there is no way for a hacker to corrupt it. The data, instead, is hosted by millions of computers simultaneously.
According to the team at BlockGeeks, “Blockchain technology is like the internet in that it has a built-in robustness. By storing blocks of information that are identical across its network, the blockchain cannot: 1) Be controlled by any single entity 2) Has no single point of failure.”.
How Can Business Use Blockchain Technology?
There are many potential uses for blockchain technology in business that automate and protect a data transaction. For example, a derivative could be paid out when a financial instrument meets a certain benchmark with the use of blockchain and bitcoin. Another use case would be supply chain auditing. A good example of this would be blockchain based timestamping of a date and location for a corresponding product. (i.e. ensuring you are not buying blood diamonds, fish sold at market was sustainably harvested, etc.). Another is file storage which would protect the contents from being hacked or lost. As well, since it’s already distributed it might prove to be a good fit for decentralized websites and has the potential for increasing file transfer speeds and streaming times. Ultimately, a blockchain can be programmed in any number of ways and is itself an autonomous, decentralized system. BitCoin cryptocurrency, for example, uses it’s own blockchain to perform actions like sending someone 1BTC but is a separate layer that lives on top of a blockchain. The blockchain is utilized to actually perform the act of transacting data. In this case, the data is the bitcoin, and the bitcoin wallet address.