Can you sense the turmoil in the Internet industry? Yes, it’s the advent of new kind of technology or let’s say it as a new Internet- the Block Chain technology. As the name suggests, it is a chain of growing blocks (records or data) that is decentralized and not copied essentially over a network.
These blocks are linked and secured using Cryptography and the first work done on a cryptographically secured chain was in 1991 by Stuart Haber & W. Scott Stornetta. They have added Merkle trees to the block chain to collect several documents in one block.
However, the gifted mind behind the first distributed blockchain is Satoshi Nakamoto in 2008 who later; implemented it as a core component in Bitcoin (digital currency) where it serves as the public ledger for all transactions.
What actually is the block chain technology?
This new phenomenon is emphasized on sharing and collaboration rather copying the records where both the parties can access the documents simultaneously and can make the changes in the same at one time.
Let’s understand it with a daily life scenario:
What is the usual way of sharing the documents with collaboration? The sender sends a file; let’s say a spreadsheet over a mail and recipient will do necessary changes and then reply his consent. Right!
What’s the problem with it?
The sender is restraint of editing that file until the recipient is done with that and it is copied each time when sending is required to any other person resulting into high chances of hacking or alteration, and reproducibility, (Somewhat like bank transfer procedures!)
For instance, banking process works in the same fashion; they briefly lock the access when they are transferring the amount and update another end, once it is done. (One at a time!)
Now contrary to this:
The Google sheet, for example, can be messed with both the parties at the same time and a single version of the file is visible to both of them. Moreover, the distributed part comes into the scene when it is shared over a number of persons.
Why is it a sensation?
There are several drastic characteristics which have made this technology trending and next big thing in the Internet world. Let’s have a look on some of those:
#1. The Internet with added robustness
In this highly vulnerable web world, there are high chances of record corruption or making several versions of the same record which can alter the whole purpose. Not only this, the traditional way of securing data over single server is not secure as well.
So what’s different with blockchain?
Designing network of blocks where each batch of blocks has transactions hashed securely by the previous block erase the problem of reproducibility. Moreover, the trait of decentralization, where data is stored over the network eliminates the risk of records held centrally.
Bitcoin is the live example of that, since its inception from 2008 it has functioned without any disruption and its value has now become a history. In nutshell, lack of single point vulnerability cannot be exploited by hackers. (Cool huh!)
#2. Transparency and incorruptibility is the key
“A lack of transparency results in distrust and a deep sense of insecurity!”
This quote of Dalai Lama is manifested by various IT experts like Vitalik Buterin, inventor of Ethereum who states that manipulation is the biggest threat to the transparency and can be solved by Block Chain.
The fact that data is secured over the network kinda public itself removes the questions of transactions’ transparency. Isn’t it a big achievement in 21st Century?
As the records are distributed across the nodes, altering any unit of data requires a lot of computing power and that too with the consent of public to override the entire block network. (Practically impossible!)
#3. A different network of nodes
Remember the definition of the network?
Yes, the so-called terminals connected with a host or server is called a network. Right?
Right! But it will soon be revised by the blockchain as every node of it is an “administrator”. The nodes get the copy of the transactions as soon as they become a part of the block chain and together they create a powerful 2nd generation network.
The bottom line:
Each individual nodes get the incentive of participating in the network- winning bitcoins. In other words, nodes are Bitcoin miners as they solve computational puzzles. (Interesting huh!)
Who will use the blockchain or what is its scope?
Long are those days when people use the hard cash transactions or withdrawal from the bank for daily usage.
The future of finance could be dominated by the block chain technologies from recording or indexing transaction safely, to ordering or paying in Bitcoin and even identity identifications.
The fact that blockchain cuts out the middleman from any type of transactions will highly reduce the cost for all market participants. In short, it will change the whole scene of global banking. Blockchain will do for finance, what Iron man did for Avengers.
Let’s take you to one decade ahead:
Block chain will soon be adopted by central financial institutions like central bank and cryptography secured currencies will become widely used. Not only this, block chain has the potential to create new Industries and disrupt the current ones like banks.
This technology can be used to distribute social welfare in developing nations. Last but not the least government building- elections will soon be instantaneous unlike expensive & arduous.
Now it’s your turn:
You have just seen the dawn of ways new Internet that will change the course of world…
Now it’s time to share this technology news to your peers for more awareness.
The first step?
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