If you are a person who already knows “Bitcoin”, you must have heard about “Blockchain”. Blockchain technology is expected to “Change the world”, applying and technologizing industries such as agriculture, health, banking, education, finance, e-commerce …
What is Blockchain?
Blockchain is defined as a decentralized digital ledger, storing information in blocks of information that are linked together by extremely complex encryption. The ledger is shared among the people who join the network.
Blockchain is designed to resist changing data: once the data is accepted by the network, there is no way to change it.
Who created Blockchain technology?
The inventor and designer of the first Blockchain were Satoshi Nakamoto, who created it in 2008 and was realized the following year as a core foundation of Bitcoin. Through the use of a peer-to-peer network and a decentralized data system, the Bitcoin blockchain is automatically managed.
The birth of Blockchain made Bitcoin the first cryptocurrency to solve the fraudulent spending problem when an amount of money was spent twice. This technology of Bitcoin has become the inspiration for a variety of other applications as well as coins later.
What does Blockchain work?
Blockchain allows the exchange of value without the need for trust or proof of trust. That is why Blockchain technology is the most preeminent invention from the Internet up to now. Take for example I and you bet $ 50 on San Francisco tomorrow’s weather. I guess it’ll be sunny, and you bet it’ll rain. In this case, we have 3 options to manage this transaction:
- We can trust each other
- We can turn the stake into a contract
- We can turn to a neutral third party
Both trust and contract are not the best solutions. We cannot trust strangers and enforcing contracts takes time and money. Blockchain technology is interesting because it gives us a safe, fast, and cheap third option.
Blockchain allows us to write a few lines of code, the program runs on the blockchain, to which we both deposit 50 dollars. This program will keep $ 100 safe and check tomorrow’s weather automatically on multiple data sources. Each party can verify the contract logic, and since it is running on the blockchain it cannot be changed or stopped. Sunny or rainy, it will automatically transfer the full amount to the winner.
Characteristics of Blockchain technology
Blockchain cannot be counterfeited or destroyed
Data in Blockchain is immutable, cannot be edited (can be edited but will leave traces), and will be stored forever.
Information and data in Blockchain are distributed and absolutely secure. Anyone can track Blockchain data going from one address to another and can statistic the entire history on that address.
Smart Contract: A digital contract embedded in if-this-then-that (IFTTT) code, allowing them to execute themselves without the need of a third party.
The applications of Blockchain in practice
Here are a few practical examples of the application of blockchain technology in practice:
- Applications in the e-commerce field such as accessing purchased product information, receiving support, paying via e-wallet, enjoying loyalty program, accumulating points system…
- Applications in the fields of finance and banking: Bitcoin Atom, Aeternity, Ripple, Securrency, ABRA…
- Application in the supply chain. Blockchain provides an easy way to confirm that the products we buy are genuine.
- Application in agriculture. MedRec, for example, uses blockchain to save time, money, and to iterate over processes between different establishments and vendors. Patients can also access their medical records to research medical service providers. MedicalChain uses blockchain technology in storing and using electronic medical records to provide a complete telemedicine experience.
- Application in the Internet of Things (IoT): IoT is the control network management of certain types of electronic devices, for example, the air temperature in a warehouse. Smart contracts can automate the remote management of this system.
The above content is compiled from reputable websites about Blockchain. This article is particularly suitable for newbies who do not have much experience in the market.