Newsletter #171 What Exactly is Blockchain?
Hello, yeah it's been awhile
Not much, how 'bout you'
Our last newsletter wasn't quite as long ago as when England Dan & John Ford Coley first sung this (1976), but it has been awhile.
Blockchain is the underlying technology behind cryptocurrencies such as Bitcoin. Here's a few pointers to help you understand what a blockchain is:
- A blockchain is a growing list of records linked by cryptography. The block itself is a record of the new transaction and when it is completed it is added to the chain.
- It is an open distributed ledger that can record transactions between two parties efficiently in a permanent and verifiable manner
- By design a blockchain is resistant to modification of data, it is a viewable record only
- A blockchain is typically managed on a peer-to-peer network which has a protocol for managing and validating new blocks
From Blockgeeks: “Picture a spreadsheet that is duplicated thousands of times across a network of computers. Then imagine that this network is designed to regularly update this spreadsheet and you have a basic understanding of the blockchain.”
Proponents of blockchain and cryptocurrencies like the distributed storage without a middle man . You don’t need a bank to verify the transfer of money or take a cut of the transaction.
So where to for blockchain technology? It seems the most common uses in the near future, apart from cryptocurrencies could be:
- For banking the use of distributed ledgers could be useful, particularly for back office settlements
- Blockchain is already being used in video games to catalogue game assets<
- To create a permanent, public, transparent ledger system for compiling data on sales, tracking use and payments to content creators
- Online voting
Blockchain, together with Bitcoin has been overhyped, but like lots of previous technologies, the long term benefits and uses have also probably been underestimated.
Best wishes
Alex Garden