A blockchain network in simple terms permits trading without depending on an intermediary or a central authority. A blockchain is comprised of a series of time-stamped of immutable records of data that is overseen by a group of computers not owned by a single entity. In simple terms, Blockchain is a “chain” of information that is connected together by “blocks”. “Blocks” are made up of digital pieces of information. The “Chain” is the database that connects the blocks. Blocks have an array of information that offers insight to a particular function. For example, a block can contain the; date, time and the price of a product when an online transaction occurs. They also contain a digital signature that is unique to the user. When a block stores new data it is integrated into the blockchain.
Bitcoin & Blockchain
Blockchain infrastructure aims to oversee transactions without human processing. A popular technology that uses blockchain is bitcoin, which is a digital currency. Bitcoin can exchange products and services, like the GBP or USD. Currencies that we use in today’s economy is fiat money. Traditional money is a government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it. Bitcoin is decentralised, meaning no one controls the currency – unlike traditional money. Bitcoin is a peer-to-peer money system, whereby the payment processors like Visa or Mastercard are not involved in the decision or have any authority of the transaction. Bitcoin’s value is also not attached to any political or economic situation, and it can exist independently outside of the traditional system.
Blockchain technology is a fundamental layer that allows currencies like Bitcoin to operate. The information is distributed and copied across countless computers worldwide. The successive string of every block ever carried out comprises a blockchain. Deals from a specific network, like Bitcoin, fill blocks. As the deals are verified, they are put together into the blockchain.
The Future Of Blockchain Technology
You don’t have to understand how the blockchain functions for it to be helpful in your life.
As of now, the finance industry offers the most grounded use cases for the technology. Blockchain removes the mediator or ‘middle man’ when exchanging. It is much faster and cheaper at processing transactions than traditional methods. This could potentially offer a new wave of innovation in banking industries and generate new currency concepts like Bitcoin to move money away from a centralised system. This technology is in its infancy and we are yet to see the true ramifications of what this particular innovation can offer.