What is blockchain technology?

In this chapter, we tell you everything about blockchain. Whether you’re a beginner or already familiar with the subject, this article will answer all your questions.

 

What will we treat?

First, we start with the meaning and definition of blockchain technology. Next, we’ll tell you a little more about the history of this technology. Finally, we conclude with examples and case studies from practice.

 

What is it?

A blockchain is a decentralized collection of data stored in order of when that data was received. The data cannot be adjusted or manipulated, so it is seen as an objective data set.

Although blockchain is often mentioned in the same breath as Bitcoin, they do not mean the same thing. Blockchain is neither an app nor a company. It is a new way to store data on the Internet safely and reliably. The technology can be used with applications, payment providers, social networks, and more. There is, therefore, no such thing as one blockchain; several. Many technical experts have already compared blockchain to the rise of the Internet.

As mentioned, a blockchain is a public ledger with information. This can be information about money transactions, agreements between parties, insurance contracts, or the energy use of a specific device.

 

In short, all transactions and information can be saved.

 

However, to save the information, ‘the network’ must confirm this data. The network consists of several computers, also called nodes. Once the nodes within a network have reached an agreement (consensus), the information is added to the blockchain. This happens with every transaction. From that moment on, it can no longer be modified or removed unless the entire network has reached a consensus about the most commonly used consensus system is called Proof-of-Work.

Data is not stored on a central database, as is usual. However, in this case, different copies of the data are stored in other places and computers (nodes). This is also known as peer-to-peer(p2p). This ensures that the data is kept safe if a point within the web is damaged.

 

Example of the Bitcoin blockchain

The information stored on the Bitcoin blockchain contains all the details of transactions that have been made. For example, think of the amount of the transaction, the sender of the transaction (the Bitcoin address of the sender), the recipient of the transaction, and the exact time of the transaction.

 

Where did the name come from?

The name comes from how data is stored within the ‘chain.’ Information is stored in blocks. These blocks are connected with each other, creating a chain. In other words, a blockchain.

This structure ensures that the data is so reliable. If you’re in a bad mood and want to change data, you can only do so by changing all the blocks further down the chain. This is not possible to do without the network finding out.

Each new block contains data from, for example, transactions that have been made. This also includes a digital signature linked to the associated account from which the transaction was made.

 

A blockchain has three properties:

 

  • All data, except private data, are public and accessible to everyone
  • Information is stored decentrally, distributed over different computers
  • All data is stored in combination with the corresponding time of that data
  • The code is open source, which means that anyone can view it

 

The inventor of blockchain

It was in the year 2008 that blockchain technology was first discussed. The technology was described in a document about Bitcoin. This document, also known as a white paper, was written by Satoshi Nakamoto. Unfortunately, Satoshi Nakamoto is not a real name but an alias. To this day, no one can say who the mysterious person (or group) is behind the founding of Bitcoin.

 

What do we know?

In previous documents of the same author, he claimed to be a man born in 1975 and residing, or was, in Japan. So, when the record came out, and he invented the technology, this mysterious man was 33 years old. Because Satoshi created Bitcoin, he was the first Bitcoin holder. We have learned that data on the blockchain is transparent and public. We can also see how much BTC he owns. Currently, that number is about 1 million.

Who precisely the mysterious creator is, is not very important. What matters is that this person had a vision. A vision of a decentralized currency economy that didn’t require banks. This has led to Bitcoin. This written piece will go deeper into Bitcoin and how it works.

2008 is far behind us, and there are now many more blockchains than Bitcoin. Some projects are comparable; others have expanded the concept further, creating a platform where much more is possible than just processing transactions. These projects include NEO, IOTA, Cardano Lisk, and Ethereum. Unfortunately, because the cryptocurrency price has risen so fast, many people claim it is a bubble. And while the price hike may well be a bubble, most people don’t understand that the technology behind all these digital currencies is not a bubble.

Blockchain is the Internet of the future. This will bring about a more significant revolution than, say, e-mail or perhaps even the Internet.

 

Applications

There are various industries and sectors where blockchain can be of added value. For example, many large multinationals have a department within the company that is busy developing ideas to improve business processes and efficiency.

 

Financial sector

From processing administrative data to processing payments. Banks and financial institutions can apply different aspects of blockchain technology.

 

Internet of Things / IoT

 

Internet

Blockchain will help secure and decentralize the ‘Internet of Things. Within the IoT, almost all electronic devices will be connected to the Internet, and information must be processed immediately.

 

voting blockchain

Votes are currently still counted by hand. On the one hand logical because regular computer servers can be hacked. When votes are stored decentrally, the result cannot be manipulated.

 

notaries and lawyers’ blockchain

One of the essential elements of this new technology is eliminating the need for an intermediary. For many ‘simple’ contracts such as a will, a notary will no longer be needed.

 

healthcare

Blockchain is great for tracking medical progress, identification, and securing patient records.

 

The future

Whatever will happen shortly in value increases and decreases of cryptocurrency, the underlying technology is leading. Thousands of brilliant people are working on the further development of blockchains and associated applications. So what is still far from your bed show can be the daily reality tomorrow.