Maybe you heard the word blockchain on the news, maybe from a coworker, maybe on the internet. Perhaps you smiled and nodded and pretended you understood what blockchain is and how it works. Don’t worry—you are definitely not alone. It’s not an easy thing to wrap your head around. We’re going to give a brief overview of what blockchain is and then present some reasons that it’s important to our world today.
What is blockchain?
Chances are you’ve heard of a little something called bitcoin. It’s still a pretty big deal. Blockchain is the building block for many cryptocurrencies; in fact, the creator of bitcoin, Satoshi Nakamoto, created blockchain when he developed bitcoin.
But what is it really?
Blockchain is kind of like a mega online record-keeper. People can enter transactions into it, and when they do, those transactions can’t be tampered with very easily. That’s because different copies of the mega online record-keeper are on many, many computers.
In order for a transaction to be marked down, it has to be checked by every computer that has a copy of the record. And then when that happens, the transaction is stuck onto the record. The record keeps its list of transactions for the designated amount of time, and when the record book is done, it’s sealed shut and given its own “fingerprint” of letters and numbers.
Then a new record book begins, and it’s linked to the other one. So, the result is a lot or record books that have been linked together.
Why is blockchain important?
There are lots of reasons that blockchain is important. We’ll go over five of the main ones.
1. It’s really hard to hack or tamper with.
Like we mentioned above, it’s really hard to hack or chance a blockchain transaction. The transactions that are recorded are there for good, and since the record is in so many different places, it’s not easy to hack it or mess with it.
First of all, a hacker would have to unseal every piece of the chain of records until they could get to the one they wanted. But then they’d have to go and tamper with every single version of the record…meaning messing with every single computer that holds the record. Chances are they’d be found out—someone would realize what they’re doing.
2. It uses pseudonyms.
Blockchain uses pseudonyms, which allows for more privacy. And there isn’t one individual with control over the records, so no single entity has power over it.
3. Blockchain is the building block for many cryptocurrencies.
Blockchain is important because it provides a basis for numerous cryptocurrencies—bitcoin among them. Though these cryptocurrencies gain popularity and buzz, it’s blockchain that allows them to be possible.
4. Blockchain can keep records of data in a way that’s secure.
We discussed above how difficult it is to change transactions that are stored in the record book of a blockchain. But this idea doesn’t only extend to money or currency. It can also record information so that businesses can track things.
5. There are a lot of potential applications.
There are many, many ways that this technology could be used in various industries. It’s not only about money—it can also help with data management. That’s why a lot of different industries and businesses are interested in blockchain and how it can be applied in day-to-day life. People are curious and excited to see what blockchain can do and how it could be used.
Some industries that are already trying to use blockchain are:
- Fantasy football
- And it’s even though that blockchain could be applied to industries like banking, food distribution, and logistics—perhaps even voting.
Want to learn more?
Amesite offers an entire course about blockchain and its applications. The class not only discusses data management and how blockchain technologies are used, but allows students to explore security, privacy, and regulatory questions about it. You can find out more about the class and register here.