Ever heard of Bitcoin? Ever heard of Blockchain? Do you know what is blockchain technology? Yes, I have too. 2017 will forever be remembered as the year Bitcoin, Ethereum, and the rest of the cryptocurrency industry became firmly part of mainstream life.
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This is the year that the world’s attention and imagination were finally captured by this industry as a result of its breakneck speed growths and the seemingly limitless possibilities it offers for modern life.
This is an industry whose growth is beyond what has ever been witnessed in the history of business and investment. And despite what its naysayers keep peddling about it, it keeps soaring in leaps and bounds.
Cryptocurrencies are, however, only a fraction of the true representation of this intriguing industry, as there is hardly a sector of business or even life in general that will not come under its influence in the very near future.
From Healthcare, to Insurance, to Elections and Self-driving Vehicles, every known sphere of life has something to benefit from the meteoric rise and endless solutions this industry promises.
Behind all the glitz and glamour and unstoppable surge is a gentle giant that powers it all. Be it cryptocurrencies, or other forms of life services, everything about this industry stems from perhaps what has been mankind’s greatest achievement so far, the BLOCKCHAIN TECHNOLOGY.
This is the core of the new rise of whole new industries and modalities of doing business, this is what powers the greats like Bitcoin and promises to uproot big world monopolies in every industry and give control back to the user who so far remains sidelined.
Blockchain technology is a limitless universe, and in this article, we will go over what it actually is, what features it has, some industries that benefit from it, and what the future might hold for this fascinating piece of human creation.
What is Blockchain Technology ?
Blockchain technology can simply be explained as a decentralized open ledger system of adding, verifying, and then recording transactions between peers in a transparent, efficient, and irreversible manner.
Blockchain technology is the first known man-made creation that is impossible to compromise, sabotage or change by any other human or single entity once it is put into play.
Blockchain technology was pioneered in 2009 by a person or group that goes by the pseudonym Satoshi Nakamoto, when he/they released the Bitcoin blockchain.
This was to be an open ledger system on which transactions of anything of value, be it a currency or even tokenized titles of traditionally non-liquid assets can be recorded between individuals in a very fast, highly efficient, and completely non-restrictable manner.
The blockchain technology adheres to no border or bureaucratic red tapes as it can be used to send payment or any other thing of value between individuals directly without the use of any middleman, and with no regard whatsoever to border or state regulations.
Blockchain technology has no single point of beginning or ending, as the participating nodes or computers that make it up are spread all over the world and as such it has so far eluded every attempt of sabotage from unscrupulous online criminals and shutdown from world governments.
How does blockchain technology work?
Blockchain tech is actually rather easy to understand at its core. Essentially, it’s a shared database populated with entries that must be confirmed and encrypted.
Think of it as a kind of highly encrypted and verified shared Google Document, in which each entry in the sheet depends on a logical relationship to all its predecessors.
Blockchain tech offers a way to securely and efficiently create a tamper-proof log of sensitive activity (anything from international money transfers to shareholder records).
Blockchain’s conceptual framework and underlying code are useful for a variety of financial processes because of the potential it has to give companies a secure, digital alternative to banking processes that are typically bureaucratic, time-consuming, paper-heavy, and expensive.
Features that Make Up the Blockchain Technology
Blockchain technology has so many distinct features that make it such a unique invention and gives it a limitless horizon to explore. Some of the most important of these features include:
1. Decentralization
This is perhaps the first, and most important feature of blockchain technology, as it represents the core ideology that brought about its creation.
Blockchain technology in all its various ramifications was created with the ultimate goal of taking away ultimate power from service industry providers who have turned whole sectors into their backyards and redistribute this power infinitesimally to people, in such a way no one has absolute control over the fate of any service that is built upon it.
Blockchain technology is an open ledger that is created to accept, verify and then add transactions, with no central core or building where its infrastructure resides.
It is the technology that gives every user access to a computer and an internet connection to participate and become an active stakeholder in any service or industry.
This design is created in such a way that for any major change to be ratified, every member of the said network, notwithstanding their size or geographical location must arrive at a consensus as to the direction of the change that is being proposed.
The genius in this new model of service provision is that it is inherently democratic and protects the interest of the majority at all times.
2. Immutability
Another key feature of blockchain technology is that it is completely immutable in its design.
This simply means that once a transaction is accepted, verified, and then stored on any blockchain, it cannot be undone by any entity whatsoever, not even the creator of the blockchain can change the values and inherent data of such a transaction.
The immutability of the blockchain is among the key reasons it remains one of the most highly reputable pieces of technology, that even though it is not issued by any government or central authority, its users feel at ease in using it to distribute value and assets among themselves because they rest assured their transactions cannot be rigged by any biased party once it is completed.
This un-changeability of transactions on the blockchain technology is the star attraction that led to its wide adoption, as for the first time in history, mankind has created something that cannot be counterfeited once it is created and put into play.
3. Security
Another key aspect that keeps driving the popularity of blockchain technology through the roof is that it comes with a natural security mechanism that cannot be replicated in centralized systems.
Service providers from big retail chains, to cloud computing services, often suffer excruciatingly painful attacks on their facilities that often see highly sensitive information of their users being stolen by hackers.
This is because centralized systems give these online criminals a single point to keep attacking and perfecting their hacking weapons until they eventually succeed in breaching their firewalls.
With blockchain technology, it such a limitlessly faceted technology with no single point of failure, this translates to the inability of hackers no matter how skillful to inject any malicious software on it that does not get rooted out immediately.
4. Immense Computational Power
Blockchain technology represents a great portion of where the world’s computational power is deployed in the 21st century.
Blockchains such as that of Bitcoin or Ethereum are such great megaliths of computational power that no single entity on earth, either government or company has a similar kind of sheer hash power under its purview.
The result is that blockchain technology is completely immune from any attempt by any regulating entity in the world to shut it down.
The decentralized nature of millions of computers spread all over the world, all pooling their computational power and resources into a single network gives it an edge over anything unlike it.
These blockchains such as the Ethereum blockchain is so huge that it is able to provide the infrastructure for other cryptocurrencies such as the like of Bitcoin or other applications to be built on it.
Applications of the Blockchain Technology
Blockchain technology has numerous applications, from banking to the Internet of Things. In the next few years, BI Intelligence expects companies to flesh out their blockchain IoT solutions.
Blockchain is a promising tool that will transform parts of the IoT and enable solutions that provide greater insight into assets, operations, and supply chains. It will also transform how health records and connected medical devices store and transmit data.
No piece of technology is worth anything unless it has a real and practical use that makes it make sense to its users. Some of the obvious and most important applications of blockchain technology include:
1. Finance
The very first application with which blockchain technology made its debut was in the financial sector, where it gave birth to the first stateless, borderless, and completely self-sustaining peer-to-peer virtual currency in the shape of Bitcoin.
The traditional financial industries in the world at the very beginning thought this was some geek idea that would only fly so far, and that it was an exercise that was doomed to fail.
About 9 years later all these assumptions have been dumped as the industry has since grown from ignominy to be worth in the hundreds of billions of dollars. The financial sector is now at full attention as the cryptocurrency or alternate financial industry is gaining traction fast.
This is because it offers people fair participation in creating value themselves. It offers them a hassle-free, secure, and highly economical way of transferring value between themselves without the need of any middleman or adhering to debilitating state rules that stifle business.
Major players in this field include the aforementioned Bitcoin, Litecoin, Monero, Ripple Zcash, and a host of others.
2. E-Commerce
This is another vital sector of modern-day life that blockchain technology seeks to create an upset.
The present crop of e-commerce conglomerates is plagued with a number of problems ranging from their limited service to certain regions of the planet to the incessant security risks they are exposed to which often sees the vital personal and payment information of their users being stolen by online criminals.
Blockchain technology seeks to create completely decentralized e-commerce platforms where it deals with each problem the present monopolies keep grappling with.
With the use of blockchain technology, the middleman is eliminated from the equation of any transactions which makes it cheaper.
It also offers users the choice of making their payments without ever swiping their credit or debit cards which enhances protection over their identity and payment.
3. Energy
The way we consume energy whether at home or in our factories has come under strict scrutiny in the past few years, as a result of the increased awareness of the danger posed by climate change on our dear planet.
Carbon footprint monitoring has been plagued with a lot of scandals and accusations of doctoring of data between countries, and on the home front, we also grapple with having to manually tweak and turn our electricity and energy consumption to suit the present environmental sensitivities.
With the use of blockchain-based IoT devices, all the nightmares and controversies that plague modern energy consumption and carbon footprint monitoring mechanisms will be solved.
As countries now have an impartial, real-time means of monitoring each other, while energy users at home now have Smart energy optimizing tools that automatically tweak our energy usage, to make our bills less and our consumption friendlier to the environment.
An example of a startup in this field is GRID+, which promotes the use of smart-energy grids in modern homes.
The Future of the Blockchain Technology
Blockchain technology is indeed a revelation that will change the way life is lived on our dear planet. In less than a decade it has risen from obscurity to fame and influence that has not been seen since the rise of the internet.
The blockchain technology great genus in sensitizing people about what is deemed impossible is unmatched by any technology before it, as it offers users like You and me a glimpse of the juicy side that has so far been the exclusive forte of big monopolies like Google, Facebook, and Amazon.
This technology as it is very obvious has already begun shaping life as we know it, and will likely continue to do so for the foreseeable future.
There are so many ills that plague almost every sector of business that users have been forced for so long to quietly accept, and blockchain technology with its inherently democratic nature is here to right those wrongs.
Despite what its detractors say, blockchain technology holds all the four aces due to its multi-faceted, and immensely powerful structure, which means whether governments and other regulatory authorities around the world like it or not, it is here to stay with us, as there is just no feasible way of rolling it back, or shutting it down.
What are cryptocurrencies?
Cryptocurrencies are essentially just digital money, digital tools of exchange that use cryptography and the aforementioned blockchain technology to facilitate secure and anonymous transactions.
There had been several iterations of cryptocurrency over the years, but Bitcoin truly thrust cryptocurrencies forward in the late 2000s.
There are thousands of cryptocurrencies floating out on the market now, but Bitcoin is far and away from the most popular.
How do you mine cryptocurrency?
Bitcoin, Litecoin, Ethereum, and other cryptocurrencies don’t just fall out of the sky. Like any other form of money, it takes work to produce them. And that work comes in the form of mining.
But let’s take a step back. Satoshi Nakamoto, the founder of Bitcoin, ensured that there would ever only be 21 million Bitcoins in existence.
He (or they) reached that figure by calculating that people would discover, or “mine,” a certain number of blocks of transactions each day.
Read Also: How Bitcoin Works Under The Hood (+Video)
Every four years, the number of Bitcoins released in relation to the previous cycle gets reduced by 50%, along with the reward to miners for discovering new blocks.
At the moment, that reward is 12.5 Bitcoins. Therefore, the total number of Bitcoins in circulation will approach 21 million but never actually reach that figure.
This means Bitcoin will never experience inflation. The downside here is that a hack or cyberattack could be a disaster because it could erase Bitcoin wallets with little hope of getting the value back.
As for mining Bitcoins, the process requires electrical energy. Miners solve complex mathematical problems, and the reward is more Bitcoins generated and awarded to them. Miners also verify transactions and prevent fraud, so more miners equals faster, more reliable, and more secure transactions.
Thanks to Satoshi Nakamoto’s designs, Bitcoin mining becomes more difficult as more miners join the fray. In 2009, a miner could mine 200 Bitcoin in a matter of days. In 2014, it would take approximately 98 years to mine just one, according to 99Bitcoins.
Super powerful computers called Application Specific Integrated Circuit, or ASIC was developed specifically to mine Bitcoins. But because so many miners have joined in the last few years, it remains difficult to mine loads. The solution is mining pools, groups of miners who band together and are paid relative to their share of the work.
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