Could you imagine what it would be like if everyone could maintain their own records or transactions without having to rely on an intermediary such as a bank?
The latest updates in technology can leave room for that to happen, and blockchain may be the way to achieve this.
Harvard Business Review is now doing Facebook Live Videos and if you are subscribed to their Facebook page, they will let you know when they are live.
We were taking a quick lunch break when we were notified of their blockchain video. It made us curious enough to do some extra research.
What is blockchain?
Blockchain is a way of storing information into blocks that link with previous blocks of stored information. These blocks form a chain of information that link together in a time-stamped chronological order.
Blockchain is useful for storing medical records, legal documents, and keeping track of electronic votes and more.
How does it work? Here are some highlights:
- Every time someone adds current information into the database, it creates a new block that includes information from the previous blocks.
- Blockchain is a distributive ledger that keeps track of records and financial transactions across multiple computer networks that can be shared.
- Each party that is part of the network can verify inputted information is correct, and once verified, it becomes a new block. Think of blockchain as being like Wikipedia.
- Multiple people can upload and update the information found on this site. This is how blockchain works.
- This technology cannot be controlled by one person or business entity. Anyone within the shared network can access the information, but stored data cannot be tampered with.
- A hacker would need to access all blocks (including the previous blocks) across all the hosted computers the blocks can be found on to tamper with the information. (Pretty cool security feature when you hear about data breaches on the news all the time.)
- This makes blockchain more secure for those who use it as it incorporates cryptography, which is a form of coding information in a way that only those who are part of the network can understand.
- Cryptography also works for creating digital signatures so everyone within the network can verify who owns or did what.
Example of blockchain:
Ever heard of Bitcoin? Bitcoin is a digital form of money that allows people to make payment transactions directly with one another without having to involve a third party.
Blockchain is what makes this work. The transactions between users are kept with blockchain and verified through the digital signatures users provide.
Each transaction creates a block, and when information for the transaction is updated, it helps create new blocks with the previously stored information. Thus, forming a blockchain of information regarding the transactions that no one can alter.
Now, there are people who claim Bitcoin is used for nefarious purposes because it cuts out the third party, but what do you think?
Could this be the technology that could give all businesses an edge? Could this help governments work together? How could it apply to your company or life?