what is a 'blockchain'?
A Blockchain is a continuously extending chain of data sets (blocks) linked to each other in a cryptographic process. A Blockchain can be designated as a database with special characteristics enabling the safe storage and transaction of data within a network without the need of a central intermediary.
The Blockchain was initially invented by Satoshi Nakamoto with the creation of the cryptocurrency Bitcoin in 2008. Bitcoin and its underlying technology, later called Blockchain, has extremely valuable characteristics in our todays world driven by data and computers. It enables literally everyone with internet access to participate as a peer in a decentralized network which means that all data sets are stored across the network rather than on a central server. This makes the data stored in it extremely safe or rather digitally immutable. In the following paragraphs we are going to present you the unique characteristic Blockchain is offering and what opportunities it provides to make our data and planet more transparent and safe.
Blockchain enables peoples to participate as peers in a decentralized networks where all data is stored across the network. This makes the Blockchain and the data stored in it very safe, as there is no weak point enabling hackers to attack. Huge companies like Google, Facebook or Wells Fargo operating with sensitive user data are investing billions of dollars every year, trying to prevent their users from hacker attacks. Still, data breaches, and thefts are happening year after year. Blockchain might be the solution helping these companies saving costs while increasing the safety of their customers.
Bitcoin and all other cryptocurrencies do not rely on any central party. Through incentives the network or rather its peers are administrating and verifying all transactions by themselves. As this might sound unspectacular to you it is actually a pretty revolutionary thing. In the history of humankind, it is the first time that people around the globe are able to exchange valuable things whenever with whomever and howsoever without knowing the counter party and without having to rely on a third party ensuring the safety of the transaction. Through the decentralization in combination with cryptography all peers participating the network are able to transact with each other without any restrictions. Through Blockchain trading gets frictionless, eradicates fraud and establishes trust between transaction partners not even knowing each other.
FEELESS AND FAST
With Blockchain, foreign payments will not cost you 10%-20% commission fees and take up to 7 days from order till execution. They will cost you a few cents and will get executed within minutes. It does not depend if your receiver is currently in China, USA or South Africa. All transactions will get cleared within a few minutes, only depending on the congestion and speed of the Blockchain. This means that now everyone, no matter how rich or poor can participate in the global economy. To this date poor people had no possibility to accumulate wealth and central banks had no incentive to offer products to these customers as a business with micro transactions is not reliable. Blockchain is solving this pain allowing everyone with internet access to participate. No more restrictions and credentials to set up a bank account, no more data needed in order to trade. All mutually advantageous transactions can take place on a Blockchain. This technology is allowing humans to finally transact money the same way as we exchange information these days. Globally, fast and for free.
The data stored within a Blockchain is immutable or in other words unhackable. Every block is cryptographically connected with its previous blog and all the entire history of all other blocks. Additionally every block is locked with a unique cryptographic key. If someone would want to alter information of only one block, it mans that he would have to change the information of all other blocks as well. This makes a hacking attack impossible and even though the price of Bitcoin is high, calculations show that the computing capacity, electricity costs and the duration of such a project would exceed the benefits of owning the entire Bitcoin network. With this safety standard Blockchain may help reducing manipulation, hacking and corruption while leading a new path in a transparent world.
THE UNIVERSAL LEDGER
Every transaction of a Blockchain gets immediately executed and cleared. In the case of Bitcoin, running on a public Blockchain, all transactions are visible and accessible for everyone in a digital ledger. This ledger is recording and time-stamping all transactions 24 hours a day. All this happens without human errors, without the need of any third party and is only displaying correct transactions as the universal ledger is only referring to verified transactions of the Blockchain. This means that e.g. accounting firms could soon offer their services on Blockchains. No more corruption, no more errors and no more overhead costs. Their clients would save a lot of money and could not only see a snapshot of their financial situation every quarter of a year but rather have access to it every second, as the ledger is updating and chronologically recording all transactions.