At this point, everyone is well aware of Bitcoin. However, it can be tough to distinguish Bitcoin from the blockchain technology which is where Bitcoin transactions take place. So then the question is: what is blockchain technology? It is a term that people throw around when discussing Bitcoin and other cryptocurrencies, but most are unaware of what it actually is. The blockchain is an ingenious invention, created by a person or group of people know by the pseudonym of Satoshi Nakamoto. You can think of it as a new type of internet. Intended initially for Bitcoin, the tech community has found other uses for the technology.
An easy way to understand the blockchain technology is by imagining a spreadsheet duplicated thousands of times across a network of computers. The design of this system is to update the spreadsheet regularly, and that is a basic understanding of the blockchain. Basically, information held on a blockchain lives as a shared and regularly balanced database. It is not stored in a single location, so the records kept are public and easily verifiable. There is no centralized version of the information, so it is secure from hackers. Now if one would define the blockchain, you could say that it is a “technology that offers a way for untrusted parties to reach a consensus on a common digital history. A common digital history is important because digital assets and transactions are in theory easily faked or duplicated. Blockchain technology solves this problem without using a trusted intermediary.
As mentioned before, there can be other uses of the blockchain technology. One, in particular, is a land title. It would be beneficial for people to have access to a decentralized source of record that says who owns a given piece of land. So, once two parties agree on a land distribution, they can record this in a distributed ledger, and it would not be the subject of an ongoing debate. Identity would be another way to utilize the blockchain technology. With the recent Equifax hack that exposed the social security numbers of over 140 million Americans, the blockchain can present a better way to establish identity. So, rather than a state or government issuing it, the open and global blockchain would verify the identity. Users would be able to control their own identity.
Now, it is also important that we take a look at a couple of the major issues that come with blockchain technology. While they are good at some things, they are also pretty bad at others. One example is scaling blockchains. For a blockchain to work, it requires many participants to hold up-to-date copies which can be quite inefficient. This issue is one of many issues the blockchain technology faces, but it is important to keep that in mind.
Overall, the blockchain technology is without a doubt a fascinating innovation that due to the popularity of Bitcoin and Ethereum, has taken the world by storm. It will certainly develop as the year progresses and it will be interesting to see the impact it makes.