Bitcoin and blockchain technology are popular terms used in the crypto world. Bitcoin is a peer-to-peer currency exchange system. A person or a group of individuals with the pseudo name ‘Satoshi Nakamoto’ invented it back in 2008.
However, bitcoin gained widespread acceptance after a price bubble in 2017. Although governments still look at bitcoin transactions with suspicion. Nonetheless, individuals are eagerly turning towards it for safekeeping of money.
Blockchain technology is the backbone of bitcoin. It is a digital record-keeping system. Counterfeiting of bitcoin is made impossible by blockchain. Besides, fooling this system is no child’s play. Blockchain has some unique features. Beyond crypto enthusiasts, innovators from all industries are eagerly monitoring the potential of blockchain technology. In the near future, it will likely disrupt all areas of humans experience.
What is Blockchain?
As the name suggests blockchain is the ‘chain of blocks’. Blocks are basically the chunks of digital information hanging on the chain of the public database. It is a distributed system with multiple nodes across the globe. Individuals sitting on those nodes can make changes in the underlying code. There are no third parties or intermediaries involved. It is an open-source, truly peer-to-peer system built on trust. “Blockchain is a distributed, decentralized, public ledger.”
The ‘blocks’ of data have the following composition:
- The first piece of information is the date, time, and value of the asset you purchased.
- The second block records the name of the participants involved in the transaction. However, it is not the actual identity of a person. Blockchain uses ‘digital signatures’, a form of username for storing this data.
- Lastly, the blocks have to be distinguishable. For this, each block saves a unique code. This code is known in blockchain terminology as ‘Hash’. For instance, if one person purchases a similar kind of asset from the same place twice, then blocks storing information of these two transactions will only have different hashes.
One block on the blockchain has a storage capacity of 1MB. Essentially, it can store data of thousands of transactions.
How it works: Blockchain is a distributed database.
It uses cryptography to save records of two parties making a transaction. There is no central point or server. Instead, millions of computers around the world receive data.
Nodes: The computers act as nodes. A node comes in contact with blockchain with the help of clients. Subsequently, a copy of blockchain data gets downloaded into the system(i.e. node). Likewise, the latest blocks of information also syn in.
Miners: A node that facilitates the execution of value transactions is called miners. Miners have powerful supercomputers. In return, miners get paid in bitcoin. Pre-requisites for a block:
The following things must happen for the addition of a block to the blockchain:
- First of all, a transaction of value must occur. For example, you make a purchase from a vendor.
- The second step is the verification of transaction. Blockchain is built on trust. Therefore it is important that an entity verifies all the details. In this case, networks of computers check the time, value, and participants’ information. This whole process only takes a few minutes.
- After verification, the information becomes part of a block. The constituents of info being, the transaction time, amount of dollars, and buyer & sellers’ digital signatures.
- At the last stage, the block is given a hash. This makes it distinguishable from the rest of the block. Finally, the hashed block becomes a part of the blockchain.
How Blockchain technology can impact human experience:
Security and trust are among some of the biggest issues today in the world. And not just in the business sector. Even in personal life, people struggle with building trust. What if there is an unhackable, immutable distributed-database technology that can keep a record of everything? This way you know what, when, where, and how something happened. It will give new meaning to the security of data.
Blockchain technology has the potential of disrupting of current systems. However, the first target of blockchain revolution is the financial industry. Moving forward from that, you have the communication industry, Political institutions, Transport industry, Healthcare, and charity. All of these will transform for the better. Let’s discuss in detail how blockchain will impact each of these areas:
1. Financial Industry:
Blockchain moves money, stores money, keeps a record of money, lends money, and trades money. These operations are fast and secure. Unlike the traditional banking system, blockchain is decentralized. Therefore, the likelihood of a hacker breaking into the system is nearly impossible. In many countries of the world, banks are increasingly adopting the blockchain system. Consequently, financial services will look very different from what they are now.
2. Communication Industry:
The communication industry has real threats of hacks, information tapping, and disruption in the lines. The blockchain technology enables faster, secure, and more reliable communication. Additionally, it has a digital automation feature.
Currently, we are experiencing this aspect in email and call notification. However, with blockchain authorized, bi-directional and free communication will occur in automated settings. Besides, the record of this communication will be immutable and safe with the system. This will make the mode of communication reliable for the participants.
The centralized servers make data loss and hack plausible. Moreover, human error can cause problems. Blockchain will resolve these issues as well. The data has verification and encryption operation using advanced cryptography, before storage on the cloud. The robust technology makes prohibits the entrance of unauthorized users into the system. Improved security and protected barriers make cyber attacks, data-stealing, or any other sort of corruption non-viable.
4. Political Institute:
The public is often dissatisfied with politicians and bureaucracy. The tools of democracy such as elections are also seen as sham in many countries. Nonetheless, with blockchain technology, this could change. It will enable the verification and counting of votes with accuracy.
Thus giving widespread legitimacy to elected representatives. Additionally, governments can also employ blockchain for secure, efficient, and transparent dispensation of affairs. For example, unemployment benefits and other welfare funds can be easily distributed.
Charity scams are very common. People have become skeptical of NGO’s. Fraud charitable organizations take money on the name of the poor but fill their own bank accounts instead. With blockchain, you can make sure that your money reaches the needy. It offers smart contracts and transparent systems. Donors can keep track of where their charities are ending up. United Nations is already using blockchain technology for distributing food among refugees.
A decentralized healthcare system will make the Job of hospitals easy and efficient. Doctors will not have to go through a plethora of documents before patients’ examination. They will simply look up the medical history of a person. Same can happen with a centralized system. However such private information will not be safe at centralized servers. Therefore, blockchain can provide a more workable and secure solution.
7. Transport Industry:
The transport industry can renovate itself with blockchain technology. Users can book rides, pay for the parking lot, fuel, and other stuff with peer-to-peer sharing apps. The current taxi services may seem distributed but the control is in the hands of owners. However, this revolution can disrupt established systems.
8. Entertainment Industry:
Blockchain can also transform the entertainment industry. With smart contract technology and trackable record of artwork creators will be able to profit off their albums, films, and dramas. We will finally get rid of piracy. Additionally, users will be unable to download work without a prior license.
Thus, content generates will be rewarded fairly for their efforts. Conclusion: Blockchain technology will have an impact on human experience beyond cryptocurrency. It will change the way we plan our personal and professional life. Currently, blockchain technology is in infancy.
Nevertheless, it has shown immense resilience and potential for disrupting world affairs. Many fear the blockchain revolution as the system will have no central point of information flow. However, this is the beauty of it. It is just an extraordinary, distributed, autonomous system.
No governments, spies or hackers could break into it. Bitcoin and Ethereum are two of the popular blockchain systems. They offer their own currency (BTC & ETH) as well. But, their work is not limited here. Developers can create smart contracts and dApps on their ledgers.
The eight points listed above are just a few from many areas. Real estate, energy sector, supply & demand management, forecasting, and consulting, etc. will also transform. No area of our life will remain out of blockchain’s reach. We should all embrace ourselves for a glorious future of smart contracts.
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