What is blockchain and why is it important?
Blockchain has taken a massive leap in popularity over the last few years, so it’s no surprise that so many of us are curious about what it is and how it works. Let’s take a look at what blockchain is and why it’s important.
Before we go any further, let’s look at why it’s called ‘blockchain’: The name bloackchain is derived from the way it structures data in the database. Data is collected into groups or blocks until they reach a specific storage capacity. Once this capacity has been met, the block is then linked or chained to the previously completed block. This consistent process of filling and linking in chronological order forms a ‘blockchain’.
What is blockchain?
Put simply, blockchain is a specific type of database that locks and links specific information permanently into blocks, making it difficult or near impossible to hack into.
What’s the hype?
The hype is trust and security. Over the years, many have made attempts at creating digital currencies, like Hal Finney, who created the initial concept for cryptocurrency on a centralised system, placing the control in another person's hands, opening up the possibility for fraud.
But it wasn’t until Satoshi Nakamoto wrote the Bitcoin whitepaper in 2009, detailing what was required to create a decentralized currency, operating on a system that wasn’t controlled by any one individual, country or state - that blockchain was truly born.
Blockchain isn’t centralised, it’s a decentralized system where no one is in incharge; instead it’s being run by those who use it. For example, the most famous use of blockchain is Bitcoin currency. Due to blockchain Bitcoin cannot be hacked, duplicated or faked, creating a strong level of trust and security. Just knowing that Bitcoin can hold its value by eliminating fraud has had a positive impact on the currency and its popularity.
How is blockchain being used in other industries?
There are quite a few areas and the list continues to grow, but here are 8 industries:
Cryptocurrency
Person Identity Protection
Music Royalties
NFT (Non-Fungible Tokens) marketplaces
Supply Chains and Logistics
Storing and sharing medical data
Advertising data
Overseas payments
Although we are a few years in since the launch of blockchain technology, a lot of industries are finding ways to take advantage of the security it offers, especially in industries where data security is particularly important. As the use of blockchain progresses, we can only imagine the untapped potential.
