What is Blockchain?
Blockchain is a technology designed to allow the movement of digital currency or assets from one person to another. Known as a ‘chain’ due to the chain of transactions created during the process, Blockchain works to create a string of transactions that are open and public via copies of a live and synchronized open ledger, meaning everyone on the network can access the required information. This eliminates the need for a central transaction hub and instead ensures everyone can simultaneously see and validate transactions at any time.
How does Blockchain work?
It’s fair to say that you don’t need to understand how Blockchain works to be able to use it, but with Blockchain presenting arevolution in internet-based technology now’s the time to learn about the concept on which it is founded and operates, and begin to consider how it might benefit your organization.
Essentially acting as a method to record data, Blockchain relies on an open ledger – held digitally – that can be programed to record transactions. Capable of managing transactions for almost anything from contracts and agreements through to currency, the general rule is that Blockchain can be used to hold any form of data that would ordinarily need to be independently recorded.
But what makes Blockchain different to the existing methods used for transaction management is that Blockchain doesn’t rely on a virtual ledger that is stored in just one centralized place; instead it distributes the information it holds about each and every transaction to thousands of users on that same network worldwide.
Taking digital records and collating them, Blockchain bindsinformation and records together into blocks before using a process called ‘hashing’ to link – or chain – them together using sophisticated algorithms. It is during the hashing process that encryption takes places.
What are the benefits to using Blockchain?
Ultimately, for many organizations one of the biggest attractions of Blockchain is that by design it makes it more difficult for hackers to attack it. Because it is designed using a distributed model, rather than working with a centre hub of information, any potential hacker would need to be able to infiltrate every copy of the live Blockchain – of which there are thousands – at the same time in order to successfully break into the system. Given the vast and complex distribution across a worldwide network, that’s not easy to do.
From a privacy perspective, Blockchain works to ensure that all data is kept totally secure. It can achieve this because it creates a chain of transactions that can only ever be a one way process – making it impossible to convert back into its original, raw data form.
In addition to heightened fraud prevention and data protection, Blockchain also outperforms other designs by working in real-time: all information available on a Blockchain is not only available on a vast shared database but it’s updated continually to ensure every link within that chain is current, verifiable, open and wholly public.
Blockchain as the future
Thanks to its use of advanced technology and premier security features, Blockchain is fast becoming the go-to choice for organizations worldwide. Transactions are becoming lower cost, faster and more reliable thanks to Blockchain so if you’ve yet to fully explore what Blockchain can do for you and your company, now is most definitely the time to delve a little deeper into this impressive, growing and revolutionary new technology.