Is Blockchain the Answer?
Databases in a shared economy
When we think about blockchain, it is a place to keep, store, and exchange cryptocurrencies – but databases? The original purpose of blockchain was for digital currencies. Currently research is in progress all over the world on a great range of applications. For instance, blockchain become distributed databases. Like Google Docs, these databases enhance security and decentralization. Another asset is the distribution of digital information instead of copying it. This way, blockchain technology could actually become the back of a new type of internet.
“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 and Alex Tapscott, authors of Blockchain Revolution.
An ingenious invention
The blockchain is a unique invention. Adaptions and applications via blockchain technology could serve us in many ways. For this purpose, let us look at some possibilities listed above, starting with blockchain as a distributed database.
Picture a spreadsheet multiplied thousands of times across a network of computers. In the tech industry, these computers are known as “nodes”. Nodes are an integral part of blockchain technology. Now, imagine this network of nodes regularly updating the spreadsheet. This works like any other reconciled database. However, a distributed database has millions of nodes working simultaneously. There is no centralized version of the information. It is open to the public. Verification is easy. Information is encrypted. This makes hacking or corrupting the blockchain nearly impossible.
Before Google Docs, we sent Microsoft pages and spreadsheets back and forth. We sent emails, editing and updating along the way. However, synchronous changes were not possible. Then came Google Docs, a free web-based application. It allows for creating, editing and storing documents and spreadsheets online in real time. Documents are private or shared among friends and co-workers. Any authorized user with a full-featured web browser can access the document. The blockchain allows for similar application development for legal contracts and shared ledgers.
No significant disruption
Invented in 2008, the blockchain has operated without significant disruption. To be clear, problems to-date were often caused by human error. Other reasons were inside hacking or mismanagement. Consequently, flaws in the underlying concept were not among the reasons.
A network that is not controlled by any single entity and no single point of failure is revolutionary. Storing blocks of identical information across such a network is full of potential. Correspondingly, this concept brings and keeps everyone to a high degree of accountability.
A state of consensus
The blockchain network lives in a state of consensus. It automatically checks in with itself every ten minutes. At this point, this self-auditing ecosystem reconciles every transaction. It then embeds it into public blocks for purposes of transparency. In any case, corrupting or altering any unit of information on the blockchain would require enormous computing power.
Thus, all of the above brings us back to blockchain’s underlying cause for success – decentralization. Today, a global network of computers uses blockchain technology to jointly manage database recording transactions. Decentralization means the network operates on a user-to-user, or peer-to-peer, basis. This structure runs on management by the network, and not by any one central authority.
The shared economy
All things considered, how blockchain technology may serve us in the future is just the tip of the iceberg. Blockchain creates a type of shared economy by enabling peer-to-peer payments. It opens the door to direct interaction between parties for supply chains or file storage. Crowdfunding, smart contracts, and even governance are other possible applications. This form of networks in mass collaboration will most certainly turn into a vital assets in various developments across a wide range of industries.