Blockchain is a technology that allows
individuals and companies to make instantaneous Digital Transformation companies on a network without any
middlemen like banks. Transactions made on blockchain are completely secure,
and, by a function of blockchain technology, are kept as a record of what
happened. Strong computer codes ensure that no record of a transaction on a blockchain
can be altered after the fact.
Here’s a more in-depth look at what a blockchain looks like.
Funnily enough, you can explain a
blockchain as literally a chain of blocks. Those blocks represent data, held
all together in a specific order. You can also imagine it as a ledger—because
that’s essentially how most blockchains function. Each block of data represents
some new transaction on the ledger, whether that means a contract or a sale or
whatever else you’d use a ledger for.
A blockchain is a record of transactions.
Using blockchain, companies or people can both make and verify these
transactions. That’s two very important concepts lumped together, so let’s take
a closer look. Blockchain allows companies to make transactions.
Blockchain allows companies to verify
transactions. Adding a transaction to a blockchain involves getting it
verified. Whatever your “network” is, everyone will have agreed to rules that
determine which transactions are valid and which are not.
This “democratic” system of security is one
of the biggest reasons why so many people are flocking to blockchain right now.
No one can change the records, so blockchain is a trustworthy and fair source
of information that anyone can verify.
Blockchain is instantaneous. Transactions
on a blockchain get processed and verified much more quickly than the
alternative systems. This might seem counterintuitive because the lemonade
example makes it sound like everyone has to copy everything that happens to the
chain. But in actuality, these transactions get processed by computers in
milliseconds. The reason why blockchain is much faster than the alternative is
that it’s decentralized, so let’s talk about that to finish off the definition.
Blockchain Is decentralized. Blockchain
operates with no central authority. This is the kicker. Blockchain lets people
or companies add and verify their transactions, without a single governing body
making sure everything is okay.
Blockchain technology essentially cut out
the middleman. When one copy of the blockchain ledger gets changed, they all
verify that transaction before adding it to their ledgers. And blockchain is
faster than the alternative because everybody involved doesn’t have to wait on
a single, slow-moving source for verification. It all happens simultaneously.
By now, you’ve got the run-down on blockchain explained. It’s not too
complicated, even though it sounds convoluted.
So far, we’ve got that a blockchain is a
digital ledger shared between a network of people. Each participant can
manipulate that ledger, recording new blocks of data onto the chain, but with
each transaction, the entire chain gets analyzed by everyone to make sure it’s
still accurate. In other words, everyone has their copy of the ledger. But
nobody can make a change without everyone agreeing to it. It’s a democratic
system.
That’s Blockchain
Explained, But Who Uses It?
Here’s some industries looking to
incorporate blockchain technology:
Banks and financial services are using blockchain
to cut out the middlemen and a lot of time, money, and risk when dealing with
monetary transactions. Industries that are high risk for fraud are starting to
use blockchain to verify their software. A few companies are implementing
blockchain to prevent the false certification or sale of blood diamonds and
stolen art, for example.
Digital content like music, movies, and
online ads could use blockchain to prevent piracy. By using new file formats
that can play the media and encode blockchain data that reflects intellectual
property and payment history, musicians and filmmakers wouldn’t be losing out
on millions.
In medicine, blockchain technology can be
used to prevent the theft of pills through the supply chain and give medical
history ownership back to patients (who can distribute it to their doctors, for
certain amounts of time, as they want or need).
In the food and drink industry, farmers
could use blockchain to monitor their crops—and trace where and when food
recalls occur.
Insurance could be dramatically changed.
Imagine a world where you can get the insurance that lasts for a few hours,
like if you’re doing some extreme sport. Or where Uber drivers can bypass
insurance companies by combining their money on a blockchain and creating a
safety net for themselves.
Blockchain is a development that lends
itself to creativity, so we’ll likely see some very interesting uses in the
future. Whether you’re an individual or a multinational company selling and
buying, each transaction you add to the blockchain is checked against everyone
else’s blockchain ledgers. This system prevents anyone from using the same
bitcoin more than once—which was the biggest problem with all-digital
currencies before bitcoin came along.
Since bitcoin is a purely person-to-person
digital currency model, anyone using bitcoin can make fast, secure, low-fee
transactions whenever they want, to anyone in the world. It’s a universal
currency.
Hopefully, now you’ve got a solid grasp on
what blockchain is, why everyone’s talking about it, and how it can impact your
small business. Whether or not you decide to accept bitcoins as a form of
payment depends on you and your small business needs.
No comments:
Post a Comment