While a lot of the buzz around cryptocurrencies has faded away, it turns out a lot of you are still searching for what it is. In fact, “what is blockchain” was one of the most Googled terms for 2018.
It’s also a concept that’s not easily explained and as such, remains shrouded in a thick, dank cloak of confusion and misinformation. But forget that noise, let’s tuck into it, shall we?
What is blockchain?
In basic terms, blockchain is a public digital ledger that is designed to be un-hackable. While it’s most notably used as a way to track and verify monetary transactions, it can also track and verify almost any kind of data, making it an incredibly secure platform that has the potential to change the entire internet.
Each chronological change on the ledger is referred to as a block, while the larger string of changes is called a chain. Blockchain. GEDDIT?
What makes blockchain so secure is its decentralised nature. A master ledger does not exist on any one server and instead, exists on everyone’s computer at the same time. That means that every time it’s updated with new information, every computer using the platform must agree that the change is legit.
That means if someone wanted to falsify records on the blockchain, they would need to hack every one of these computers at the same time, as opposed to a single centralised server database.
Everyone has access to the ledger at any time, but without any identifying features.
I still don’t get it
Ok, let’s pretend that blockchain is Google Docs and a regular database is Microsoft Word.
For a Word document to be amended by another person, you have to send it to them, they change it, then they send back the amended copy. In this scenario, neither one of you can view or make a change while the other has the document. You are locked the heck out.
With Google Docs, both of you can edit and view the document at all times. No one is playing silly-buggers because both of you can see and verify the changes, along with everyone else within that group (blockchain). Everyone has to agree on the outcome for it to work.
Why should I care about blockchain?
It has the potential to shake up a whole number of industries, particularly in the financial sector. Because blockchain can securely verify transactions between two parties, it effectively cuts out the need for a middle-man in many cases.
For example, let’s say you wanna transfer me money because I am good and nice and you just feel like it. Traditionally, this transfer would happen via the bank. Your bank talks to my bank and the money is moved.
Blockchain would verify that same transaction simply by virtue of how it operates. Because it must be cleared by all participants on that particular blockchain, there’s no need for a bank to touch it (until you want to transfer the Bitcoin into another currency).
Because the concept can be applied to any kind of data transference, Tim Berners-Lee, the man who created the actual internet even agrees that blockchain has the ability to disrupt the entire online world, serving as the foundation for a far more private and decentralised internet.
With more and more places accepting Bitcoin, along with huge corporate interest in blockchain technology, it’s only a matter of time before it makes some kind of appearance in your life.