In some way or another, you might probably have heard about Blockchain. It is basically the technology behind Bitcoin or cryptocurrency. Another term that you most probably have heard by now. So, what is Blockchain and how you can learn and benefit from it? So, to explain in details how the Blockchain works, we need to understand the history and definition of Blockchain.
DEFINITION OF BLOCKCHAIN
The blockchain concept was introduced in 2008 by a group of people that goes by the acronym name of Satoshi Nakamoto. The blockchain was implemented as the backbone of the first cryptocurrency called Bitcoin.
By using the blockchain technology, the bitcoin becomes the first currency in the world where the transaction is recorded in a public ledger where there is no financial body managing or monitoring it. So, in that sense, Blockchain can be defined as a distributed database where it maintains the updated transaction in a decentralized network.
CONCEPT OF BLOCKCHAIN
To understand blockchain technology, you need to know first how the normal database is currently working. Let’s try and look how the normal database for a clinic or hospital works. When they have new patients coming in, the patient will register their name and contact address on the counter. The worker or nurse would then enter this information into a folder with the patient’s name on it. They then save it into the clinic database.
The doctor then checks the patient and put a new set of information based on the doctor analysis of the patient’s illnesses into the same folder. So, when the patient come again in the future, the clinic would already have the information of the patient and together with previous analysis from the doctor that was updated in the patient’s folder. A collection of these folders together with all the patient’s the clinic received is called the clinic’s patient database.
The same goes for the financial institution. Each financial institution will have their own customer’s information in an individual file. The file consists of all the individual transaction that the person undertook with the financial institution from day one they start to put their money in the financial institution. Each customer’s ledger is kept and managed in the financial institution database.
This is how database for many institutions are being organized and run traditionally. The database is basically managed by the institution. Now, here comes the blockchain technology. The blockchain technology basically decentralized the need for a central institution to manage a database. Each transaction that is made using the blockchain will be kept in a blockchain network. The blockchain network is consists of many computers across the blockchain network.
The key element of the blockchain is the cryptography embedded with each transaction. Cryptography allows the block that the user’s own in a blockchain to be fully encrypted and therefore they are the only one who can write and edit their block. Each time they edit their block, a timestamp and a link to the previous block will be included in that block. The whole blockchain network will be updated of the new edited block and the file will be kept in sync throughout the network.
If you are still confused, try to take a look at the Google Document for example.
When you open a Google document, the file is not saved on your computer but actually saved in a Google cloud. You then invite several collaborators who can also edit the same document. The editing of the document can be done in real time. Each time someone edits the document, all the collaborator including yourself will see the latest draft. So, there is no need to have several draft version of the document as the latest edited can be seen immediately by all the collaborators.
So, this is basically similar to the blockchain concept. In this case, the Google cloud is the blockchain network and you and the collaborators are the blocks. Each time the document is edited, all of your block gets updated as well and therefore you will have the latest edited block in real time.
POTENTIAL OF BLOCKCHAIN
The technology and concept behind blockchain are still relatively new. The Bitcoin has somewhat made this type of technology more mainstream than ever. It is the same when the internet was first introduced where people are still grasping on the concept that computers are now interconnected in a global world-wide network.
Only the one who really knew the huge potential of the internet has managed to capitalize on its growth. This includes Google, Amazon and many more. The blockchain technology can be a backbone also to the internet of things. Read here to understand what is the Internet of Things.
Blockchain has a huge potential for disrupting the current business landscape due to the ability of the technology to harness the power of the internet and deliver more than information. Blockchain now enables people to transfer actual value to another person seamlessly. This value can come in terms of cryptocurrency as well as many other things. As long as it is considered as a transactional value to another person, users can interact and transfer via the Blockchain technology.
Here are some of the industry that will have an impact on the Blockchain technology.
The Blockchain is perfect for the financial institutions as it allows people to no longer to rely on a body or institution to deliver or receive value from another person. You can now transfer value via cryptocurrency via the blockchain network. Each transaction is recorded on a public ledger in which only you can have access to your block by an encrypted key access.
The creative industry is probably the next industry that is going to be hit by the blockchain technology. This is due to the fact that smart contracts can now be implemented seamlessly into the system. The artist or creative maker no longer need to rely on an institution to capture their royalty fees. Each transaction can be made via Blockchain. The artist can be paid each time a value that he or she created is accepted by someone and paid using the cryptocurrency.
The need for a government agency to monitor certain transaction or managing database can be further reduced. This is due to the encryption technology in the Blockchain which makes the information safe and secured. Therefore, public information can be decentralized and be used whenever necessary by the public itself in certain applications or field.
The medical industry would be one of the sectors that would definitely benefit from the blockchain technology. Patient’s information no longer needed to be kept centralized within a certain hospital or clinic only. The information of a patient can be accessed from anywhere as long as the patient give permission via their key access to their block. Therefore, this will decentralize the patient information and give more ability for the individual patient to use their own personal information in other clinic or hospital worldwide.
The blockchain technology is still relatively new. Therefore, it is up to us and the industry to really leverage on this technology and make an impact. It has the same feeling as when the internet was first introduced. A lot of scepticism and also non-believers at first.
However, only the one that truly understands the potential of the internet in the early days manages to capitalize on it. This is the time for us to really learn on the potential of blockchain and capitalize it either for our business or personal use.
Please leave us a comment below on what are your thoughts on the blockchain technology. We would like to hear what your opinion on Blockchain are and its impact on your industry or businesses.