What is Blockchain and How Does It Work
The nascent blockchain technology is changing the whole landscape of many industries. The emerging tech is being explored by many private companies as well as government entities across the world. With blockchain record keeping transactions literally any digital data will soon be implemented on a blockchain. Blockchain in its simplest form is a ledger that digitally stores data and has the ability to inscribe any type of transaction. Transaction information is stored as a block and then added to previous transaction in chronological order. It’s most famous for being the backbone behind flagship digital currency, Bitcoin. The new and industry disrupting blockchain technology, is an electronic database spread across the internet being constantly reconciled against other versions compared against itself thus making the blockchain incredibly difficult to corrupt because there is no single port of entry that exist for hackers to exploit. When an financial transaction takes place ( however, the database isn’t limited to just financial processing) it is spread to the nodes of vast amounts of computers hosting it concurrently making it visible for everyone. This makes transactions using blockchain technology transparent as well as more secure as the system continually self-audits itself and has the nature of being immutable. This new tech will make record keeping systems currently in place virtually obsolete and billions of dollars are being invested in blockchain with many nations looking to be the forerunner in this new industry.
While the blockchain had its beginning being designed for Bitcoin, the method which was used in accounting for the fledgling cryptocurrency is what garnered national interest. It then became the method for accounting all cryptocurrencies as nodes computers started to proliferate the network. Since then blockchain application has spread far across the world and across industries.
The rapidly changing way we share records, data and documents by decentralizing the authority held over them. With the globally distributed ledger the blockchain has effectively gatekeepers of information dissemination and any time wasted waiting for information to be processed and then returned. Blockchain has also created efficiency in transferring data as well as reducing the cost in the process. Blockchains are called so because they are defined as a system of blocks and each block are essentially individual statements. The current block records partial or complete information on a recent transaction then the block is placed into the blockchain making it part of the permanent database. On average these blocks are appended to the chain every 10 minutes. With its distributed database the blockchain can make transactions between different parties much more efficient. The cryptography that the blocks are processed through make the transactions more than just efficient they also make them more secure for all parties involved because the data can’t be duplicated only given access. This creates a secure transaction that is immutable and the record’s authenticity can be confirmed by the community as a whole. This eliminates the need for a central authority. The application of blockchain is already making its way into numerous sectors. Business operations are amending to this new technology and foregoing their expensive and inefficient accounting models. It already finds itself being used to create smart contracts a contract executed when contingencies have been met file storage and sharing auditing supply chains KYC/AMLcompliance and various other fields. It has been suggested to use the blockchain digital ledger to maintain records in the medical industry gun registration and to help stop voter fraud. The blockchain will add the next layer of security that the future needs. Blockchain has already been used to track tons of almonds shipped from Australia to Germany. One of the biggest hurdle blockchain technology faces will be consumers that are not knowledgeable to it and the fear of loss of anonymity.
However, there is no denying it blockchain is growing and there is much money and demand being focused on it. China, Malta the UK and the US are all vying for the top spot in this increasingly valuable technology.