Blockchain: The Technology of the Future
What it is & Why it matters
Over the past year, my grandfather has been through a series of health issues, filled with many doctor consultations and hospital visits. With all of this back-and-forth and getting passed around to a handful of specialists came the annoying and very redundant task of having to re-explain his medical history to each and every medical professional he met. The main question my family had was, “Why can’t this information just be recorded and shared onto a central platform for all doctors to have access to?”.
And that my friends, is exactly what blockchain can solve.
When I briefly mentioned the use of blockchain technology to solve this common yet tedious problem, my grandparents were left wondering what the heck is that.
Whether you’re in the same boat as my grandparents or just wanna read a blockchain article, you’re surely in the right place. Without further adieu, let’s answer the ultimate question.
But what even is Blockchain? 🤷🏼♀️
Blockchain is a distributed and immutable ledger that makes recording transactions much easier. On a blockchain network, virtually anything of value, whether it is tangible or intangible may be recorded and traded, decreasing risk and cutting costs for any and all parties involved.
Let’s break it down, put simply blockchain is a chain of blocks. Each block, much like a page in a record-keeping book, tracks transactions. The number of transactions in a block differs from one to the next. The connector between these blocks are the chains known as hashes, which are sequences of numbers and letters that are used to record these transactions. Each transaction’s hash is uniquely generated using information from both the present and previous transactions. This causes a chain effect, making it hard to alter the order of hashes. So once a transaction has been recorded, it cannot be changed. Don’t worry, I’ll cover this in a bit more depth shortly.
💭 Think of this…
I want you to compare sharing and collaborating with others on a Microsoft Word document to a Google Docs.
What came to your mind?
Well with Microsoft Word, sharing documents with your peers is a lot more challenging as it involves a lot of back-and-forth. Whenever someone works on the document, the recipient must wait for the creator to return the file back before making adjustments or adding comments.
Whereas with Google Docs, this process is made a whole lot simpler. You, along with everyone else who’s been granted access to the document can view it and collaborate with each other in real time. Everyone who has access to the doc can look at it, add comments, suggestions, along with modifications, the list goes on. However, after the editing is complete, the full revision history is accessible to all viewers. One cannot make an edit without everyone else clearly seeing it on the revision record. Much like a shared ledger, however it’s a distributed document as it involves sharing amongst numerous people.
Now let’s take a look at some other defining features of blockchain technology.
Key attributes of blockchain:
- Transparent: On a blockchain, transactions are constantly being recorded and securely stored on the network’s nodes (people who have access to the blockchain). This means that all network participants, no matter where they are located can see all transaction data in current real life time.
- Immutable: Blockchains are created to store permanent records so that data once data is contributed, it can’t be tampered with. As a result, it’s a very stable and trustworthy system of record-keeping.
- Decentralized: Blockchains are completely decentralized due to the fact they are governed by a network of nodes instead of a single authoritative body. This ensures that no single individual has control over the system. Centralized systems rely on a middleman, whereas decentralized does not.
- Consensus: This is what gives blockchain the ability to update the ledger, giving it the power of decentralization. Any updates to the blockchain are made once a consensus is reached among the participating nodes on the network. There isn’t one centralized authority who controls updating the ledger.
- Secure: Because of its distributed nature, it’s difficult to alter or remove blockchains. For instance, if a hacker broke into a network’s computers and modified data, the rest of the network wouldn’t be impacted.
“The whole point of using a blockchain is to let people — in particular, people who don’t trust one another — share valuable data in a secure, tamperproof way.”
— MIT Technology Review
Let’s Break it Down
Each block on blockchain consists of three important elements that you should understand.
- Data: The transaction is filled with information. An example of this is Bitcoin, the data involved includes facts about the transaction such as who is sending, the receiver, the number of coins sent, etc.
- Hash: (No, not a hash brown 🥔). Hashes are unique to blocks and all of its content. It’s similar to your fingerprint or signature.
- Hash of the previous block: This is the piece that forms a blockchain! The chain becomes extremely secure as each block contains the information from the block prior.
Here’s a simple overview of how three blocks come together through the form of hashing.
- Block #1️ contains this info:
Data: 15 Bitcoins from Bob to Kate
Hash (simplified): 12A
Previous hash (simplified): 000 - Block #2 contains this info:
Data: 10 Bitcoins from Kate to Leanne
Hash (simplified): 3B4
Previous hash: 12A - Block #3 contains this info:
Data: 6 Bitcoins from Leanne to Sean
Hash (simplified): C74
Previous hash: 3B4
So how does hashing make Blockchain secure?
If a user tampers with a block, it causes its hash to change which then makes the following block, which had pointed to block #1’s hash invalid. This causes a domino effect, as the remainder of the blocks also turn invalid. That being said, hashes are not enough to put an end to tampering, as we are well aware, computers in this day and age are fast and advanced. Therefore, the user who decides to tamper can actually hide it by editing the rest of the blocks hashes. This is where the use of other methods of proof and validation come into play.
Proof Methods
Users are required to come to an agreement on the validity of the chain prior to adding more and more blocks. A common protocol is used in order to verify a block and if it’s been tampered with before it gets added. Usually this is done through coming to a consensus by Proof of Work or Proof of Stake methods to prove the correctness of the new addition. The nodes check that the new block meets the requirements of their method of Proof and if it’s valid, they count it as a part of the blockchain and continue the same process.
Applications of Blockchain:
Blockchain has the power to disrupt almost any given industry due to its attributes. Below are a few ways blockchain will be impacting the world right before your very own eyes.
🏥 Healthcare: Blockchain within the medical field has the potential to disrupt the industry, big time. Going back to the case of my grandfather and for society as a whole, personal health records could be securely and confidentially held on blockchain. This would enable medical professionals to obtain up-to-date and accurate data on their patients to give better advice or diagnoses. Not only that but it could also be used to regulate other aspects of the healthcare sector, such as the supervision of medicine, results from tests, or even the management of important supplies.
💰Digital Currencies: One of the most widely known applications of blockchain are cryptocurrencies. These are known as digital or virtual currencies that are secured by cryptography, solving the problem of counterfeit money or double-spending. In 2008, Bitcoin was founded by Satoshi Nakamoto which was the first ever blockchain-based cryptocurrency. Thousands of other cryptocurrencies also exist on the market today, each with its own set of functions and features.
🏠Real Estate: This industry is filled with paperwork after paperwork, all in order to verify financial and ownership information. Utilizing blockchain technology and smart contracts could allow for a much more secure and reliable way of transferring and validating ownership, which speeds up the full process while also saving money and decreasing the amount of paperwork involved.
👶🏻 Birth Certificates: Identification and certifications are what grant us many human rights such as working, citizenship and voting. 95 million youth do not have birth registrations all over Sub Saharan Africa. What’s even worse is the fact that if action is not taken, this stat could reach over 115 million by 2030, says UNICEF. Similar to medical records, blockchain technology could also allow for a better and more trustworthy record-keeping system. This would enable millions of people to be granted their basic human rights and easy access to their essential documents.
🗳 Voting: As personal records can be stored on blockchain, this would allow for a more easier and reliable voter verification system which will minimize fraudulent activities. Blockchain ensures nobody votes more than once, conducting a tamper free and honest vote, while only allowing those who are eligible to take part. Resulting in a far more accurate count of votes, substantially cheaper elections and society would even be able to cast their vote by pressing a button on their device.
Conclusion
Although blockchain technology might not be as mainstream just yet, due to its efficient, trustworthy and secure nature, it will continue to evolve and has the ability to take the world by storm. New to emerging technology, I am excited by the potential that blockchain has and look forward to continuing to advance my knowledge within this visionary space.
If you enjoyed reading my article or even learned something new, I would love to connect on LinkedIn. Feel free to subscribe to my Monthly Newsletter to stay updated on what I’m doing!
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