Blockchain – what is it and why?
Blockchain is really a basis of an ongoing digital revolution. This technology is a decentralized chain of blocks that record the information about data transfers. Blocks store encrypted information about transactions, deals and any other forms of data transfers. The chain does not have a common server — all blocks are located on each user’s device. Blockchain actually works similar to torrent. If you want to download the latest season of your favourite TV series, you connect directly to other users who have these files on their device. Each user of the blockchain network maintains its entire operation.
Features of the blockchain
Blockchain is a global decentralized transaction database. The information is public but no one can edit it. To “hack” blockchain it would be necessary to change all blocks in the system at the same time, which means to get access to hundreds of thousands of computers. Each user stores the whole blockchain, so no individual has a chance to influence the work of the whole system. All processes are in fact automatic calculations and the whole network is extremely reliable, trustworthy and secure.
Blockchain is absolutely not only about cryptocurrencies. For instance, Ethereum blockchain allows to operate smart—contracts. Considering all blockchain advantages, it seems to be quite clear why many institutions, including state bodies are getting more and more interested in this technology. Ukraine, Sweden and the Arab Emirates are going to introduce blockchain in the operation of state land registries. The technology looks even more promising for banking, exchange and investment sector. Generally, everything we do, whether we pay taxes or purchase mobile phones, we exchange data. Blockchain appears to be a brand-new revolutionary way to transfer this data and store it.
Prospects of the blockchain
Within ten years of blockchain era there has been many talks around this technology. Its potential goes far beyond cryptocurrency transactions and can be implemented everywhere when it comes to accounting, verification, transferring and storing data. Blockchain is quite likely to squeeze traditional methods of data transferring soon. In fact it has already started to do so in the financial area. But will it succeed? The time will show.