Behind the blockchain hype
Technology has changed and will continue to change the world we’re in, transforming how businesses operate and how we live our day-to-day lives. In the 1990s, the internet began bringing the world closer together. The rise of social media platforms has forever changed how we consume information and communicate with each other.
In the past year, we’ve been hearing more about blockchain and how it has the potential to be the most disruptive technology of the next decade. Some commentators have even dubbed it the “next internet”. So why is there so much hype around blockchain?
Let us first understand what blockchain is. To put it simply, blockchain is a distributed and decentralised electronic transaction ledger. It is an append-only database, which means that once a new transaction is recorded it is unchangeable: it cannot be overwritten, edited or deleted. Only new transactions can be added.
Each transaction or record is stored in a “block” and is linked to the previous “block” based on a timestamp and other key information, hence the name blockchain.
Through this link or chain, the information once entered cannot be changed as that would require changes to the previous block and the rest of the blocks prior to that one.
Just imagine if someone is trying to change a record that was entered today on a blockchain that started back in 2009. That would be nearly impossible unless he or she singlehandedly controlled that specific blockchain to be able to change all the records that existed in the past.
On top of that, the blockchain resides on a distributed network which means that anyone who is part of the network has the same copy of the ledger. It gets updated continuously as new records are added.
Updates are made through a consensus system, which requires a majority of participants in the network to reach an agreement on the latest version of the ledger. This unique property is what makes blockchain decentralised and transparent in nature, as it does not require a central authority to keep or verify any records or transactions.
Why has there been so much hype around blockchain? In a word, Bitcoin.
The astonishing rise in value (over 1,000%) of the father of cryptocurrency in late 2017 captured the world’s attention and made millions of people curious about what blockchain is. As the most prevalent application of blockchain, Bitcoin is what brought blockchain to mainstream media and the mass consciousness.
Blockchain technology is still in its infancy and we can expect more great things in the future. The obvious benefits that we can see now — such as security, transparency and decentralisation — already have many companies experimenting in a range of sectors from finance to healthcare, digital transaction management and the supply chain industry.
Blockchain is here to stay but we just need to give it time to mature. It definitely has the potential to revolutionise how we do things in the future. Just look at what it has done for cryptocurrency and the disruption taking place in traditional banking.
The rise of cryptocurrency got everyone’s attention, but many other uses exist.