Blockchain is one of those trendy tech buzzwords. But what even is Blockchain technology?
First, let’s look at an example of how blockchain is used in cryptocurrency, like Bitcoin:
What is Blockchain?
Think of blockchain as a digital record keeper…
…with multiple computers (each called a node) in a network verifying, approving and storing data at the same time.
Data is organized into groups, blocks, which can only hold a certain amount of data. So when one block can’t hold anymore data, a new block is added, forming a chain.
Like having an encrypted name, each block is identified by a unique cryptographic “hash,” which is a math function that transforms data into an array (collection) of characters (numbers, letters and symbols). Each array must be the same size: for example, 2 rows by 3 columns.
The hash protects the block’s data, as well as its location in the chain by referencing the previous block and linking the two, making both the block’s data and location unchangeable.
What Industries Use Blockchain?
Blockchain applications can be found in many industries – not just banking and cryptocurrency.
Companies are using blockchain to find inaccuracies in booking data, and then alerting relevant hotels, travelers and agents about these discrepancies.
By using blockchain, patient medical records can be securely transferred, and the medicine supply chain can be better managed.
Blockchain is used to ensure food safety, remove counterfeit foods, confirm food labels and improve overall supply management.
What are the Advantages of Blockchain?
1. Increased accuracy
Errors are reduced because multiple computers are verifying the data; if one computer makes a mistake, another computer will catch it.
2. Higher Security
Blockchain is almost impossible to hack because it’s so difficult to reverse the cryptographic hash to the original data. Even if a hash was reversed, the other computers in the network wouldn’t be able to validate the change.