What is Blockchain Technology? And what makes it so groundbreaking?

A blockchain is a digital, decentralized, public ledger that allows digital information to be distributed, but not copied. Though cryptocurrencies like Bitcoin are the most common use for blockchain, they’re not the only use. Like email is to the internet, Bitcoin is to blockchain. So what impact can blockchain have on trade?

Trade has become increasingly more complex over the past decade. We currently use third parties like banks to handle the complexity of trading valuable resources. This creates one centralized point where funds or information is stored. The problem with this method is that they require unnecessary time and money, and make it easier for hackers to steal resources. The blockchain removes the third party allowing us to trade publicly with one another. This speeds up the transfer of resources, eliminates transaction fees and creates a public database that verifies each transaction.

Each transaction is a block. Each block is encrypted to prevent tampering. Every piece of information is then secured with its own key. Only people with the key can add to it. When a transaction occurs, cryptography is used to secure pseudonymity, and the ledger is updated to reflect the trade. The strict framework of rules the blockchain puts data through ensures transactions are logged and verified by each node in a network of computers that own a full copy of the database.

The security of this system actually lies in the number of computers keeping record of the ledger. Having millions of computers owning the same database makes it highly difficult for one person to corrupt the system.

By allowing data to be distributed, but not copied, the blockchain creates a basis for an entirely new type of interaction. How can this game-changing invention be used?

Since the blockchain can be used to record transactions of virtually anything of value, there are limitless opportunities. The blockchain will do for asset transfer what the internet did for information transfer, eliminating intermediaries and providing people with a frictionless platform for transactions. The future of blockchain is unknown, but this alternative form of trade can provide speed, transparency, and security in an otherwise threatening environment.

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