Blockchain For Dummies: How To Understand This New Technology

Ah, the blockchain! While you’ve probably heard of this term – mostly thanks to the meteoric rise of Bitcoin, particularly in 2017 – you might still be at a loss of the technology that serves as the backbone of Bitcoin: the blockchain. Aside from being a public ledger to record all Bitcoin transactions, blockchain technology actually brings more use cases than just Bitcoin. In fact, it can apply to so many industries, that it could be logical to consider it as the 8th wonder of the modern world (a bit far stretched? Maybe… maybe not). As we pass each day in this modern world where technology is always developing, the application of blockchain continues to spread far beyond helping people with a new monetary system such as Bitcoin, or any other cryptocurrency. Its uses these days include helping with supply chains, healthcare, and even government-related tasks, among others. Let’s take a deeper dive to learn and understand more about what all the hype is really about for blockchain technology.

Well, what is a blockchain?

Another term for a blockchain is a distributed ledger (perhaps you’ve heard of DLT – Distributed Ledger Technology – just don’t confuse it with a BLT – because that’s a different subject entirely), but normally a distributed ledger is just called a blockchain. Before we explain a bit further, consider the two words that make up the name: “block” and “chain”. 

Blockchain gif

Since these blocks are connected only to other blocks – without having a central institution that regulates them – the system is decentralized, which means the information is never controlled by one central source (at least that’s the concept anyways). Every recording of transactions involve people (or miners) giving confirmations by solving algorithms with the help of supercomputers, to ensure that those transactions are recorded.

By nature, since it is meant to be decentralized, it’s also open and distributed, which means anyone can check for recorded transactions in it by accessing a blockchain explorer. It is by all of the above that the blockchain provides much positivity to this technological age, including transparency and even efficiency for both the public and governments alike.

Miners who give confirmations within the blockchain network also provide some sort of a security layer, as they act as verifiers of transactions which are happening on the blockchain. Once these transactions are verified and recorded, they become nearly impossible to alter in any way. If one were to try hacking and altering this record, it would be up against miners’ supercomputers, which work by one-time hashes that cannot be reproduced or changed, thus making it theoretically really hard for a blockchain to get hacked. A blockchain also tends to be efficient because the machines used by these verifiers often solve transaction hashes within seconds or minutes.

Because a blockchain is transparent, decentralized, efficient, and secure, it can be good for many things, as mentioned before. The core principle is this: basically anything that needs the characteristics of a blockchain could benefit from one.

History & major events

The blockchain did not come into debut until Bitcoin first emerged, albeit still in the form of a whitepaper, in 2008. A year after, which was in 2009, Satoshi Nakamoto, the mysterious founder of Bitcoin, offered the cryptocurrency as an open-source project. As the popularity of Bitcoin grew, so did the knowledge of blockchain.

Enthusiasts and developers learned more about this new tech product, and in 2015, along came Ethereum, the world’s first distributed computing platform based on the blockchain. With Ethereum, people can develop and run decentralized applications on their blockchain. It’s not limited to only being used as a form of currency like in Bitcoin’s blockchain.

Different types of blockchains

While starting out as a technology to “power up” Bitcoin, blockchain has now branched out into at least 3 different kinds (although there are still debates over these various types of blockchain):

Blockchain

  • Public blockchain

These are the ones that Bitcoin and Ethereum use, and like what we have explained. These are the original, public blockchains that anyone can access and use.

  • Private blockchains

 Monax is a good example that uses private blockchains. In a private blockchain, written permissions are centralized and governed by an organization, therefore making it centralized. It’s a subject of debate whether it’s a true blockchain or not.

  • Federated/consortium blockchains

In these blockchains, transactions are verified within a group, which also takes the role of leadership. This means that not everyone with access to the Internet can participate. Some financial institutions, such as R3 bank, is employing this kind of blockchain. It is arguably “public” to some extent, within the people of an organization.

More information

Aside from the information that we have provided you with here, you can also learn from various educators in the field of tech. One of the most notable players here, IBM, is offering their service to help people develop their own blockchains, providing the education needed. If you think your business might benefit from implementing blockchain, it may be worth taking a look at.

Once you are done “blockchain-ing” your business, we figure you’d need some help in marketing it, and that’s exactly where we can help. We have worked with various blockchain-based businesses and provided them with digital marketing, crowdfunding, audience building, and social media management services. Check out our website to learn more about our services that we are offer, and ping us if you need anything. We also have a blog where you can freely access available information for your business’ growth. If there’s anything in your mind that you’d like to ask us concerning our services and your business, feel free to shoot us your questions!


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