The blockchain is an incorruptible digital ledger of ... virtually everything of value.
A Blockchain can be thought of as a locked dataset stored and duplicated many times over in the cloud. The data has no centralised version for a hacker to corrupt, so should one duplicate become compromised, the power of the group auto-corrects the information. In essence the information is continually reconciled. It would be near impossible for a hacker to change anything in the Blockchain. Blockchain technology is therefore used by cryptocurrencies to ensure its security and legitimacy.
History of Blockchain
The Bitcoin cryptocurrency was the first innovation in Blockchain. The digital currency is thought to have been developed by a person or group known by the alias, Satoshi Nakamoto in 2009 (it is still not clear who he / they are).
Further innovation came through the realisation that the underlying technology in Bitcoin had other use-cases, thus Blockchain was born.
One of those innovations were the incorporation of Smart Contracts, spearheaded by Ethereum, a second-generation Blockchain protocol. With Smart Contracts, promises to say fulfil an order on receipt of funds, could be negotiated without the need for a middle-man system. Further, actual programs could now be built directly into the Blockchain and self-execute.
Examples of potential uses for Smart Contracts are:
- Selling energy
- Land rights in Africa
- University grades
- Protection of copyright and IP
Going forward, the next challenge for Blockchain is to scale its capabilities. This means the speed and volume in which any Blockchain technology can process transactions for example, is increased to be on par with those of say VISA or PayPal.