You’ve heard this word everywhere lately, but what does it really mean? Simply put, it’s a way of structuring and storing data. Think of how you pack things up to move. Things are put in boxes, the boxes are labeled with the contents, and then it is stacked inside the moving truck or storage unit. That’s it, really.
So why is that revolutionary? Or special?
It’s not that special or revolutionary at all. How it is being used, is what the fuss is all about. It enables something called distributed ledger technology (or DLT), which is an important step in the evolution of how data is stored and shared. Until now, most companies had private databases. They just had no other means. If they allowed anyone to look at their databases, it would have created huge security risks. With blockchain technology, it can be owned by no one, added to by its users, and all the information can be seen publicly. This use of a public ledger creates transparency never before seen, which in turn enables a company (or government) to show what they are up to, be held accountable, and thus gain trust.
That’s a very simple way of understanding a blockchain. The great thing about it is its simplicity. It can be created very quickly - there are YouTube tutorials under 20 minutes long showing you how to code your own blockchain from scratch! It can also be written in JavaScript, one of the most widely used and easy to learn coding languages. Even someone who has never coded before, EVER, could learn how to code a JavaScript blockchain in under a week, just following simple guides and tutorials.
Here are some real-world uses that are already applying blockchain technology:
Decentralized Internet: Much like hosting web servers and services on the Cloud where your data is replicated, hosted, and served from multiple locations around the world. This virtually eliminates all downtime.
Smart Contracts: Smart contracts remove the expensive middleman from standard legal contracts, saving a lot of time and money.
Decentralized Markets: You can buy or sell currencies, items, and services without interference or reliance on a third-party service and team to operate.
Distributed Cloud Storage: Never lose your data again, and never have to worry about it being turned over to authorities, or having employees at a hosting company snooping around. If anyone remembers the witch hunt for mp3 files due to RIAA complaints in the early 2000s, you’ll understand why this is important. People shouldn’t go to jail over listening to music, no matter what.
Decentralized Social Networking Sites: The current big social networking sites are packed full of advertisements, clutter, censorship, and give away your data. Decentralized social networks can operate without any of those problems, and in some cases, even reward you for your contributions to the network.
Encrypted Messaging: Either by email or real-time instant messages, it can be stored on the blockchain, accessed only by a private key, without requiring any kind of personal information to be attached to it.
Proof of Ownership: Unique or expensive items could have their ownership tracked, limiting the possibility of a stolen item being sold. It could easily be checked for authenticity around the world.
Authenticated Voting: Keep track of who is registered to vote, who they voted for, and how many votes were counted. With blockchain, anybody could audit it and prove that the results are honest.
Stock exchange: Stocks and other financial products often take a few days to complete their transactions. Combining blockchain technology and smart contracts could make this happen instantly.
Real Estate: The biggest advantage is being able to check property titles and verify ownership. In addition, combined with smart contracts, transaction times can be reduced from several weeks to minutes.
Shipping, Logistics, and Food Processing: Tracking items from the beginning of its journey and through a chain of events, culminating with the products arriving at its destination is one of the greatest uses of blockchain, allowing for complete traceability including proof of origin, processing and terminus. For example, blockchain can greatly reduce fraud from the seafood industry.
Unlike normal databases that only allow a server or administrator to add data to it, blockchain typically allows anybody on the network to add to it. To be part of a public blockchain, all you need to do is run the network node software for that specific chain, and you can do so from anywhere in the world. These network nodes use one of the many different consensus methods to verify that the data being added is correct before finally accepting it into the blockchain permanently.
Here is the etherscan.io display of the BNB token, which runs on top of Ethereum’s blockchain. Instead of the expected account information you would see on any other record, all you see is an address, an amount, and a percentage of total supply.
That gives a tremendous advantage in terms of anonymity, but at the same time accountability. It exposes the distribution of wealth in a given system. Anyone at any time can see if a few people are controlling the majority of the wealth, or if it is more fairly distributed. Would Bank of America ever do this with the US Dollar? No. Would the Central Bank of England ever do this with the Pound? Fat chance. Blockchain technology allows a very acceptable balance between privacy and transparency for ledgers and transactions.
This is what a transaction record looks like on an Ethereum based blockchain. In this case, a TRX coin holder is transferring 9,786 coins from his personal wallet, into the Binance exchange.
If we click on the transaction hash link (TxHash), it displays more details as shown below.
While there are no personal details attached to this account that can be detected by the public, someone who has involvement with either of these addresses can simply trace the history of interactions, amounts, and dates. This is great in cases where you’re sending money to someone across the world, and they can’t just say “oh I never got it.” There is a clear record of who sent the money, where they sent it, how much they sent, and if it was successfully received or not.
Blockchain technology has many benefits and is set to change the way that every businesses undertakes their processes. In addition, the including of blockchain technology may lead to higher profit margins and greater customer satisfaction, as the effects of streamlining will lead to greater efficiencies in production, processing, administration, and logistics.