Newsletter #171 What Exactly is Blockchain?

Posted by Alex on 18 December 2018

Hello, yeah it's been awhile
Not much, how 'bout you'

Our last newsletter wasn't quite as long ago as when England Dan & John Ford Coley first sung this (1976), but it has been awhile.

Blockchain is the underlying technology behind cryptocurrencies such as Bitcoin. Here's a few pointers to help you understand what a blockchain is:

  • A blockchain is a growing list of records linked by cryptography. The block itself is a record of the new transaction and when it is completed it is added to the chain.
  • It is an open distributed ledger that can record transactions between two parties efficiently in a permanent and verifiable manner
  • By design a blockchain is resistant to modification of data, it is a viewable record only
  • A blockchain is typically managed on a peer-to-peer network which has a protocol for managing and validating new blocks


From Blockgeeks: “Picture a spreadsheet that is duplicated thousands of times across a network of computers. Then imagine that this network is designed to regularly update this spreadsheet and you have a basic understanding of the blockchain.”
 

Proponents of blockchain and cryptocurrencies like the distributed storage without a middle man .  You don’t need a bank to verify the transfer of money or take a cut of the transaction.

So where to for blockchain technology? It seems the most common uses in the near future, apart from cryptocurrencies could be:

  • For banking the use of distributed ledgers could be useful, particularly for back office settlements
  • Blockchain is already being used in video games to catalogue game assets<
  • To create a permanent, public, transparent ledger system for compiling data on sales, tracking use and payments to content creators
  • Online voting

 

Blockchain, together with Bitcoin has been overhyped, but like lots of previous technologies, the long term benefits and uses have also probably been underestimated.



Best wishes

Alex Garden