In its most basic form blockchain is a new tool that can be used for accounting purposes and possesses several key features that make it attractive to users. In essence, a blockchain is what it says it is - a chain of blocks that are publicly available, decentralised, and digitised.
Each individual transaction (block) is added to the chain in a chronological order to keep a public ledger which can be downloaded by a user is connected to the network.
The beginnings of blockchain technology
Despite having a variety of applications it was Bitcoin that led to its creation and what really flung the spotlight on blockchain technology. Bitcoin is a virtual, or digital, currency that has no central control and is under no authority. It is used to make payments in place of conventional currency for a number of reasons, particularly anonymity.
Bitcoin was created in 2008 by Satoshi Nakamoto - a mysterious figure who may or may not even exist, following the recent global financial collapse. It was created to give Bitcoin a ledger that was open for everybody to see and would, therefore, be a public record of Bitcoin transactions. This open nature along with several key features are what sparked the interest in bitcoin and blockchain in general.
Features of Blockchain Technology
There are a number of key features to using blockchains that make it desirable for use. One is that the record, once it has made created, is completely immutable and cannot be changed. This, along with the fact that anyone can view it creates a powerful record that inspires trust via its open nature.
Two parties using blockchain powered technology do not have to trust each other at all but the technology fills that gap for them. It is fast, anonymous, and safe from being hacked, nor can records be fabricated.
Real World Blockchain Application
The most famous application of blockchain is with bitcoin but there is a range of other applications that make its use attractive - here are a few examples:
- It is currently in use in Estonia to secure health records by using blockchain signature systems
- Barclays Bank uses blockchains to track transactions, for compliance, and to combat fraud
- The Dubai authorities are looking into ways of applying this technology in healthcare, business registrations, and shipping
- The South Korean government is working with Samsung to use blockchains to help increase public safety and transportation
- IBM has also announced that it will be launching a range of initiatives that are non-finance related with a number of their global partners
Blockchain technology is here to stay, that is the attitude of some of the biggest companies in the world right now. Barclays calls blockchain 'a fundamental part of the new operating system for the planet.'
It has now moved on from cryptocurrencies and has an increasing use in a variety of real-world applications due to the benefits that it offers such as its immutability, open nature, and the trust it inspires in users.
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