Bitcoin, Ethereum, Ripple..Everybody is familiar with these digital currencies, and I’m sure everybody knows “Blockchain” is the technology behind them. But, what you don’t know is that it’s potential uses extends beyond mere digital currencies!
The idea of blockchain has fascinated noted tech investors like Bill Gates, Richard Branson, most of the world’s banks and insurers to be the first to work out how to use it to its full potential.
So, what is blockchain, and why is it the new hype/trend right now? Lets get to it!
What is Blockchain?
Currently, most people use a trusted middleman such as a bank to make a transaction. But blockchain allows consumers and suppliers to connect directly, removing the need for a third party.
Using cryptography to keep exchanges secure, blockchain provides a decentralised database, or “digital ledger”, of transactions that everyone on the network can see. This network is essentially a chain of computers that must all approve an exchange before it can be verified and recorded.
How practical is it?
Well, in the case of Bitcoin, blockchain stores the details of every transaction of the digital currency. The important thing here is that the technology stops the same bitcoin from being spent more than once.
A simple infographic explanation is given below:
How is it revolutionary?
The technology can work for almost every type of transaction involving value, including money, goods and property. Its potential uses are almost limitless: from collecting taxes to enabling migrants to send money back to family in countries where banking is difficult.
But, the main reason why we can see a mainstream blockchain enabled transactions in the near future is because , this technology can virtually reduce fraud! The reason being every transaction would be recorded and distributed on a public ledger, for everyone to see! Ain’t that sweet?
Will it change the world?
Through the blockchain, we can go from redistributing wealth to distributing value and opportunity fairly in the first place, from cradle to grave. Including billions of people in the global economy: protecting rights through immutable records like land titles; creating true sharing economy by replacing service aggregators like Uber with distributed applications on a blockchain; ending the remittance rip-off and helping diasporas return funds to their ancestral lands; enabling citizens to own and monetise their data (and protect privacy) through owning their personal identities rather than identities being owned by big social media companies or governments; unleashing a new halo age of entrepreneurship by enabling small companies to have all the capabilities of large companies; helping build accountable government through transparency, smart contracts and the historical models of democracy. In short, YES! It will definitely change the world!
So that is the simplest explanation on blockchain, and how it will be used! Stay tuned for a more detailed explanation on Blockchain and Bitcoins!