What is blockchain and why is so important?
The Blockchain system, appeared in 2009 with the virtual currency bitcoin and is changing how we do business and will probably also affect our lives.
What is Blockchain?
If you’ve been paying attention to financial or technology news for several years, you’ve probably heard the word “blockchain” more than once.
Blockchain is a shared database that function as a book for the record of trading transactions or any other transaction. Put simply, each block references and identifies the previous block by a hashing function, forming an unbroken chain, hence the name.
These block strings can only be updated by general consensus, when it is especially necessary and, once the modification is introduced, can’t be deleted.
This means that if we change a record in a computer that has a part of the blockchain, it will automatically synchronize in the rest. In addition, if one of the nodes in the chain disappears from the network, the integrity of the chain would not be affected at all.
So Blockchain is changing how we do business and will probably also affect our lives.
But, why is it so important?
Like the Internet in the late 90s, we don’t know exactly how the Blockchain will evolve, but it will.
Since the creation of blockchain in 2009, this revolutionary technology has been copied and adapted to a wide variety of applications. Today the most common use is like a transaction accounting book, specifically tracking Bitcoin transfers (or other crypto-currencies) between different pseudonymous accounts, allowing for a global payment system never seen before.
In fact, banks have been interested in the idea of a private blockchain between central banks, which could facilitate international solutions in seconds, rather than days. On the other hand, governments are attracted to blockchains that can be used as a permanent record of property titles, incorporations, etc., and for its usefulness even as a voting platform.
In contrast, Silicon Valley is interested in the blockchain as an integral layer for the exchange of data in the “Internet of Things”. There are even blockchains that can run software that allows the creation of autonomous organizations that operate independently of any human influence.
The below inphography gives a good visual overview of what the Blockchain is and what the benefits are:
