Advancement in technology has always come in waves. If you think back, the use of mechanical energy was a game-changer, then came electricity and people started to figure out how to utilize this new form of energy. In this post, we’ll explore and explain everything you need to know about the blockchain technology and its benefits for you.
As the years went by, new uses for electricity were introduced and eventually the computer was born. After the computer started to make a name for itself, the internet came about. The internet changes the world and made it a much smaller place.
The newest wave in the tech world is blockchain and everybody is on the lookout for new and innovative ways to use it after seeing its massive growth.
What is blockchain?
If you do a simple Google search on what blockchain is, you will find a number of different analogies. The one analogy that explains blockchain the best is probably digital democracy. It is a technology that is virtually tamper-proof because there is no single owner or master copy of the information that can be altered or tampered with.
Before a change in the data can be verified, it needs to be done via consensus. Seeing that the data resides on more than just one device, it is difficult to alter the master version.
What that translates to in economic terms is that people and companies can make monetary transactions without having to pay the middle man a cent. The transactions are instant and seeing that the security of the blockchain is so unique, it is virtually impossible to fake a transaction.
It creates a permanent digital ledger is for each block of data or transactions and once something in the ledger changes, it stays like that forever. It cannot be changed or reversed.
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So how does this look like in practical terms?
Let’s say that all the hotdog stands in your neighborhood use blockchain technology for their transactions. Each one of these hotdog stands would then have a virtual ledger. Before any transaction was up in the ledger, certain rules regarding the prices, locations, and owners of each hotdog stand.
In comes Peter to buy a hotdog for $2 from Sally’s hotdog stall. Peter would pay his two bucks and the transaction would automatically be up in everyone’s ledger.
The transaction would only go according to the rules. The transaction would not be valid if the price on the transaction said $500, for example.
In reality, what happens in the blockchain is that the transaction is not add to the ledger of everyone in the network. Everyone in the network needs to verify the transaction before its conclusion. If one of the rules of the blockchain does not work, then the transaction cannot add.
What are the benefits of blockchain?
Blockchain technology is growing rapidly and the applications thereof are also growing. Blockchain in public services is also an area that is being explored. The reason why it is so popular is because of the benefits that it holds.
One of the single most amazing features of blockchain technology is the transparency of it all. Every single person in the network has access to both the ledger and the rulebook that states when a transaction is verified.
You can see every detail of every transaction at any given point in time. This also means that there is a much greater sense of security because everyone has a copy of the ledger that they use to validate a transaction. It doesn’t matter where you are on the corporate ladder as everyone has the same voting power.
Seeing that blockchain transactions are entirely digital and don’t rely on a linear path that the information needs to travel on, the transactions are instantaneous. No middleman needs to validate anything because of the validation is into the code automatically.
Lastly, there is no central authority which means that all the money that gets paid for a transaction goes towards the seller. There are no extra funds that go towards authority. It all adds to the speed and efficiency of the blockchain.
Who stands to benefit from blockchain the most?
The wonderful thing about blockchain is that it takes out the middleman and essentially a transaction is only between a buyer and a seller. Their communication and transaction are direct and therefore no one has to be in on the deal to officiate so to speak.
Blockchain the next best thing since the internet and if you are still not entirely sure how it works. So, you need to explore deeper. For the rest of us. Though, the one thing that we can look forward to is much less money on transaction costs. More on the things that we like. Blockchain technology is still in its testing phase and once you get the green light all around. As a result, we are in for some interesting changes.
Connie Elser is an academic writer in science, engineering and technology niche. She’s a true tech enthusiast who regularly releases blogs and podcasts stating its importance in education field. In her free time, she reads sci-fi books, tries gaming and goes out for long walks by the beach.