From finance to health care and propertyBlockchain technology helps improve the efficiency and security of data storage and transactions. However, many people still have questions about exactly what blockchain is… and isn’t.
The importance of understanding the myths surrounding blockchain can help us better see how influential the technology is in improving our future and why it deserves more public awareness. Here are the facts about blockchain, how it works and what it means.
Background: What is blockchain?
Blockchain is essentially a decentralized digital ledger. What makes it so unique and powerful is its simplicity; tThe technology is based on a series of “blocks” or individual storage units. Each block contains data, whether it is a title deed or a financial transaction. The block is then marked with a “hash,” a unique identity for the particular block, similar to a fingerprint. Because the hash is built on the data within the block as well as the hash of the previous block, it can change if either or both of these variables change. Blocks are then added in chains as transactions take place or data is transferred to different locations.
Because of the uniqueness hash Identity as well as the decentralized part of the technology, blockchain is nearly impossible to hack. Should hackers break into a block, they would cause the hash to change and break all the blocks behind it further down the chain. A hacker would have to rewrite all the hashes of the blocks to restore the chain. But since the technology is decentralized, the hacker would have to do it on each computer that has the specific chains, making it a gargantuan task. The data within the block itself would also be of little value since it is encrypted.
With this open system, almost anyone can see how the blockchain evolves over time, but anonymity is still maintained due to encryption and hashes. Because of this simplicity and anonymity, while at the same time being open and transparent, the technology offers many opportunities Advantages.
Analysis: The Biggest Myth About Blockchain
Blockchain is often confused with the popular cryptocurrency Bitcoin. It is important to understand that this is technology Not Bitcoin or vice versa. While bitcoin runs on a blockchain platform and has helped popularize the technology, cryptocurrency is just one of them application. Blockchain can also help in many other industries such as education, government, healthcare and real estate. Already the technology is Second hand in which finance Industry due to its near-instant secure process that lowers fees and allows for faster trades. In healthcare, several companies are storing patient records on the blockchain, making them accessible to any clinic, with patient consent of course. In real estate, technology can store title deeds, increasing the data secure and easy to transfer when needed.
For this technology to be easier to use, there needs to be a network change. According to Hart Montgomery, CTO of the open source blockchain organization HyperLedger, “We are heading towards a world of many networks. There is no one-size-fits-all solution for blockchain, so networks must communicate with each other; That means interoperability and integration are key.”
While another myth about blockchain is that it will only be available to a select few with access to this network, this is not the case. “Blockchain has the potential to open up financial services to populations that have traditionally had limited access to them and create new models for digital identities that are easier to set up and maintain,” Montgomery explained. In this way, the technology can help balance many different socioeconomic classes through a simpler and open-source resource that anyone can use.
Outlook: A more transparent technology
While cryptocurrencies like bitcoin fluctuate in value, the blockchain remains consistently secure and transparent to all who use it. This transparency makes the technology an even more important technology as anyone can see when data has changed or when a hack attempt has taken place. This is also important for industries like finance or government, where transparency can help with accountability. As Montgomery explains, “Open source and standards are the routes to ubiquity in any market; In the case of blockchain, it’s even more important since you also want a decentralized development process.
“No single entity should control the code,” he says.
Kenna Hughes-Castleberry is a Contributor to Debrief and Science Communicator at JILA (a partnership between the University of Colorado Boulder and NIST). Her writing beats include deep tech, metaverse and quantum technology. You can find more of her work on her website: https://kennacastleberry.com/