According to TechJury, by 2024 the global blockchain technology market will accumulate $20 billion in revenue. With all the hype around blockchain, you can’t say that this is surprising.
So, what’s so special about this technology? Why do they say that blockchain technology is the new Internet?
In this blog post we’ll answer those questions. Ready?
What is blockchain technology?
The first blockchain was created in 2008, as an underlying technology for a cryptocurrency bitcoin. An anonymous person or group of people called Satoshi Nakamoto developed it.
Despite being created for bitcoin, today blockchain technology has found other purposes and uses. It continues to transforms and improves numerous industries and fields. So, what exactly is blockchain?
In short, blockchain is a decentralized platform for storing data in ‘blocks’. Each block links to the previous, and contains hash, transactions’ data, and a hash of the previous block’s data.
These blocks of data are secured and tied to each other thanks to cryptographic principles, i.e. chains.
But, what is so special about this technology? Let’s find out.
What are the main features of blockchain technology?
Blockchain is relatively new technology with some interesting features. Let’s check them out:
- Blockchain technology is decentralized, which means it has no central authority, or third party controlling it. That means that single entity doesn’t contain information. Instead, everyone in the network own information. Pure democracy.
- It’s transparent. What does that mean? It means that during and after the transactions, your identity remains private. Your public address is visible, but your real identity is secure.
- Blockchain is immutable, which means that nobody can mess with the data. If you enter something into blockchain, nobody can delete or change it. And all this is thanks to the hash function.
Now, let’s take a look behind the scenes.
How does blockchain work?
The first thing you should know is that blockchain isn’t stored on one device such as a laptop or computer. Instead, it’s stored in a large network of numerous devices called a peer-to-peer network. A node is a device that is part of this network.
Every node of the network contains blockchain. When adding a new block of transactions to the network, every node has to check and verify transactions.
If all nodes verify the transactions in a block, then a new block is added to every node of a blockchain network. This process’ name is consensus.
Now, let’s say that someone wants to change or hack data in a certain blockchain. In that case, he/she would have to change data in the majority of the network’s members. And that’s almost impossible.
Blockchain use cases beyond cryptocurrencies
One of the main and most popular applications of blockchain is cryptocurrencies. After all, everything started out with bitcoin.
However, during the years blockchain expanded to other spheres as well and found application in various industries such as:
- Supply chain
- Cloud storage
- Protection of intellectual property, etc.
For example, BitDegree is a blockchain-based educational platform, with a variety of online courses. According to its website, the company uses blockchain to connect students with teachers and employers.
Or, let’s take a look at Blockverify, a startup using blockchain technology to improve anti-counterfeit measures within the supply chain industry. The company can verify pharmaceuticals, luxury items, diamonds, electronics, etc.
Blockchain technology brought us many fascinating new technologies such as smart contracts, crowdfunding, and a sharing economy. Moreover, it continues to confidently transform and improve the digital world.
We can say without doubt that blockchain is an ingenious invention with the potential to change the world.