NOTE: I’m not a financial or legal advisor. I just have a passion for software technologies and believe in Blockchain’s future. I don’t recommend you putting all your life savings in Bitcoin or any other cryptocurrency.
The New Internet
By allowing digital information to be distributed but not copied, blockchain technology created the backbone of a new type of internet. Originally devised for the digital currency, Bitcoin, the tech community is now finding other potential uses for the technology.
Bitcoin has been called “digital gold,”. The total value of the currency is close to $9 billion US. And blockchains can make other types of digital value. Check out my post on Top 10 Cryptos which illustrates the market capitalization of the top 10 cryptocurrencies.
“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” Don & Alex Tapscott, authors Blockchain Revolution (2016)
The blockchain network lives in a state of consensus, one that automatically checks in with itself every ten minutes. A kind of self-auditing ecosystem of a digital value, the network reconciles every transaction that happens in ten-minute intervals. Each group of these transactions is referred to as a “block”. It is also like the internet in that it has a built-in robustness. By storing blocks of information that are identical across its network, the blockchain cannot:
- Be controlled by any single entity.
- Has no single point of failure.
- Transparency data is embedded within the network, by definition it is public.
- It cannot be corrupted altering any unit of information on the blockchain would mean using a huge amount of computing power to override the entire network.
Put simply, a blockchain is a ledger of records organized in ‘blocks’ that are linked together by cryptographic validation. It is a digital storage of consensus truth. The key is to understand that this ledger is neither stored in a centralized location nor managed by any single entity, hence its distributed-ness. The block validation system results in new transactions being added irreversibly and old transactions preserved forever for all to see, hence its transparency and resilience. Open-source software that leverage on the blockchain technology are called Dapps or Decentralized Applications.