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Bitcoin was presented in 2009 by Satoshi Nakamoto. Developers figured the underlying blockchain technology in bitcoin and by 2016 we had more than 26000 projects based on blockchain. However only 8% of these projects are surviving.
Hope you don’t get confused between blockchain and Bitcoin. Bitcoin is cryptocurrency which is based on blockchain technology.
So what is blockchain ?
When you share a digital data to some other person then all transaction related information (encrypts) gets stored in a block but to complete a transaction this information should be verified which is done by miners. They basically solve complex algorithms which verifies the transaction and forms new block. This process is called mining. For their work they are rewarded by the system. This whole mining process makes manipulation of any transaction impossible because all the blocks are connected to each other so if you want to manipulate information from certain block you have to undo all the blocks formed after that particular block which is not possible.
Blockchain technology also prevents the problem of double spending. Let’s say you have a bitcoin which is a digital data so it is easy to duplicate it and use it on two different transaction. Miners verify each transaction and put a timestamp on a block so when you use duplicate copy the system identifies it and eliminates that transaction.
“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”
– Don & Alex Tapscott, authors Blockchain Revolution (2016)
‘Transaction’ here is not limited to cryptocurrency. Transaction can be exchange of currency, exchange of information and contracts which can have conditions to fulfill (smart contracts). All together ‘virtually everything of value’.
Blockchain is a digital ledger which is present on multiple nodes (computer) connected with the network. And data is updated on all the nodes whenever there is transaction.
Therefore, there is a transparency in the network. And there is no central authority for the blockchain to operate. So, blockchain system can not be hacked or manipulated by anyone.
Besides that, you don’t need to share your personal information to any central authority to use its services. This means your information cannot be leaked or manipulated or destroyed by anyone.
“As revolutionary as it sounds, Blockchain truly is a mechanism to bring everyone to the highest degree of accountability. No more missed transactions, human or machine errors, or even an exchange that was not done with the consent of the parties involved. Above anything else, the most critical area where Blockchain helps is to guarantee the validity of a transaction by recording it not only on a main register but a connected distributed system of registers, all of which are connected through a secure validation mechanism.”
– Ian Khan, TEDx Speaker | Author | Technology Futurist
As mentioned above any service which is developed using blockchain technology will be decentralized form. So there won’t be intermediary demanding you charges and your personal information.
Below are few industry that blockchain can replace.
Cryptocurrency, as a store of value, is the hottest investment already and it is globally accepted so you can escape all the hassle of obligations to handle your money on global aspects . What else ? It is safer and trusted because it doesn’t have central authorities and you can control your money as you want. So its quite obvious industry which will get disrupt.
Contracts and agreements :
Contracts bond a personnel by written or verbal form stating a agreement. It’s a lengthy process to clarify contracts and its build up on trust. Smart contracts can set exchange of assets when certain obligations are fulfilled so you don’t have to trust anyone as a technology is fulfilling your task. For example smart contracts can use it to set a insurance.
Voting and identification:
In blockchain based identification we only need to have a key to unlock our whole information moreover it can collect our information from all over the internet and present it at single space. Finland is using blockchain for identification of voters. Even Russian government is going to use blockchain in upcoming presidential selection for vote count.
Just imagine all government data will be decentralized and increase in transparency. Obviously the first thing that comes to our minds in less possibility of corruption. Blockchain can help people to utilize the benefits provided by government without any intermediary. So delays and bureaucracy can be avoided as well.
Wouldn’t it be nice to get free online data storage and earn some value as well?
The space unused in your device can be used for storage for other person in exchange for cryptocoins.
Filezilla, sia ,storj and maidsafe are few well known distributed cloud storage platform.
Social networking sites.
Steemit is the first social platforms based on blockchain technology. This system rewards content creators. We have sola.ai , which is combining social media with Al. Sapien.network , is highly customizable and indorse.io is platform to showcase your career profile and connect with people for job opportunity. List is long for social platform on blockchain. They are more advanced than mainstream social platform but like any other technology it will take time to evolve.
Blockchain is an innovation which is giving platform for more innovation. It’s very obvious that blockchain is still at initial age and like another growing technology it’s not going back. There are countless number of new application that will be created. So, list above is very limited and maybe its not too early to say that blockchain can take place in any type of industry which includes data management and record keeping.
Blockchains for all.
What are these enthusiasts on about? The ‘blockchain’ technology behind bitcoin could prove to be an ingredient of an entire new world of technology, as big as the internet itself, a wave of innovation that drives the middleman out of commerce and leaves us much more free to exchange goods and services with people all over the world without going through corporate intermediaries. It could radically decentralise society itself, getting rid of the need for banks, governments, even companies and politicians. Take”
– Matt Ridley, The Evolution of Everything: How New Ideas Emerge
Hope this article was helpful. Feel free to ask any question and give suggestions in the comment section.