What is Blockchain?
Blockchain is the technology everyone is talking about and is predicted to take the world by storm in the next 10 years. World Economic Forum predicts that by 2030 10% of the world’s GDP will be stored on Blockchain.
Blockchain comes from the words Block and Chain. Blocks are records of information linked together in a Chain using secure encryption (cryptography). Imagine Lego blocks joined together that can’t be taken apart again.
Once a new block is added to the chain it becomes a permanent record in that chain and can not be modified or tampered with. This chain is then replicated on to other machines on the internet so there are multiple copies of it. This makes Blockchain a Trusted technology.
Anyone can install Blockchain software on their machine and get a copy of the records. This means there is no one “owner” of the Blockchain. It is not controlled by a State, Bank or Organisation. This makes Blockchain a Decentralised technology.
In simple terms Blockchain is a way to store information that is Trusted and Decentralised.
Trusted and Decentralised are two very powerful concepts.
Trusted means it can’t be hacked, manipulated by rogue actors or states. If two parties can see that something is Trusted and can not be modified they can build services around it. For example, Bank A can transfer money to Bank B in Blockchain currency knowing it can’t be stolen or manipulated by a 3rd party.
Decentralised means if I want to send money to you I don’t need to go through a central place like a payment processors or bank to check if the transaction is genuine. The transaction would simply flow between me and you. This means the transaction is cheaper because there are no payment processors or banks to charge commission.
This is Blockchain in a nutshell. There are complexities, variances and some exceptions that we will explore in other articles.
If you want to know the origins of Blockchain currency as we know it, you can check out this 2008 paper by a person or group known as Satoshi Nakamoto.
This excellent video by the World Economic Forum gives more information: