What is blockchain Technology?
Blockchain technology is a means of recording transactions or tracking assets in a public record system or ledger. Blockchains are, most simply, a type of shared ledger in which transactions are recorded.
Unlike typical databases however, blockchain technology differs in how information is stored. While most databases store information in a table, blockchain stores information into individual blocks that are then chained together.
While various types of data can be stored, the most common usage thus far has been to use blockchain technology as a ledger for financial transactions. Each block within the chain contains data or information as well as what is know as a hash.
Hashes create a sequence that can then be traced back to its original genesis block. This is one of the reasons that blockchain technology is so secure. If any of the blocks are altered in any way, it will change the sequence of all the blocks that follow and will therefore make the following blocks invalid because they will no longer match the consensus ledger. This process secures the information contained in the network and provides protection against any tampering by outside parties.
The hash therefore functions as a means of verifying that the information or data has not been tampered with. Since each block has a hash that connects to the previous block as well as to the subsequent block, even small changes in the sequence of either would result in changes to the blocks before and after. Altering just one transaction in the chain would create something like a domino effect.
Blockchains are managed by a decentralized network of computers or nodes. Each node retains a copy of the ledger, thereby ensuring every piece of information stored within the ledger is verifiable by any of the users in the network. The data storage is decentralized; every node has a full record of the transactions or ledger since its inception. The entire history of transactions is available, and the data is therefore safe, immutable, and verifiable by every user.
Blockchain technology was conceived in 1991 by a group of researchers, including Stuart Haber and W. Scott Stornetta. Blockchain was originally intended to timestamp digital documents thereby making it impossible to backdate them. Despite these early origins, blockchain technology was largely unused until 2009. In this year Satoshi Nakamoto harnessed the power of blockchain to create the first cryptocurrency, Bitcoin.
In 2009 Satoshi Nakamoto used blockchain in the inception of Bitcoin. Satochi Nakamota is the pseudonym given to the creator(s) of Bitcoin and to this day they remain anonymous. Bitcoin utilized blockchain technology to develop the word’s first cryptocurrency.
Using blockchain technology, Bitcoin created a decentralized, peer-to-peer network to allow for secure transfer of monetary value between parties. Bitcoin uses the distributed ledger of blockchain technology to create a decentralized record in which computers around the world act as nodes. The decentralized nature of Bitcoin disallows for any one person or entity to have control of the blockchain. This aspect is clearly one of the most valuable attributes of Bitcoin currency because it offers an unparalleled level of asset security.
As described above, Bitcoin uses the blockchain technology to ensure security of the data by a sequential fingerprint for the contents of that block. Each block contains two hashes that connect it to the preceding one and the one that comes after. These fingerprints are always unique.
Changes to previous transactions in the ledger will not stand up to scrutiny because every user has access to the full history of transactions. Each transaction is verifiable by the community due to the decentralized ledger. If anyone tried to alter the information in any one of the blocks it would be rejected by other nodes in the network. No centralized authority or single entity can tamper with the data.
The creation of Bitcoin and other crypto currencies has revolutionized how we’ve come to think about currency. Many advocates say Bitcoin is essentially digital gold because like gold, there is a finite amount of supply. When Bitcoin was created a finite supply was established, meaning there will only ever be 21 million Bitcoin available. The finite nature of this currency is thought to provide a hedge against inflation. Unlike traditional currencies which can be devalued through the printing of more money, Bitcoin has the potential to hold its value over the long term.
Recent reports suggests that cryptocurrency users have reached upwards of 221 million globally. Approximately 11% of Americans own some share of Bitcoin. While the value of Bitcoin has been fluctuated drastically over the years, the currency has so far stood the test of time.
Application of Blockchain Technology
Aside from its uses in the development of crypto currencies, blockchain technologies have also allowed for innovative business applications to emerge. Two of the most prominent applications include smart contracts and non fungible tokens (NFT’s). Smart contracts are automated agreements that are activated as soon as a set of predetermined conditions have been satisfied. These are stored on a blockchain and allow all participants in an agreement to ensure outcomes are met without delay. These contracts do not need to rely on the involvement of an intermediary.
Non-fungible tokens, or NFTs are digital works of art which have been transformed into a verifiable asset. These are unique and can include collectibles which can be traded with ease on the blockchain. Some NTFs have inspired bidding wars and have allowed many artists, musicians, and other professionals in the entertainment world to reap large windfalls through their sale. A video of LeBron James’ slam dunk, for instance, was bought for more than $200,000.
The application of blockchain technologies is being utilized in a host of industries. Blockchain technologies are bridging fields such as financial services, medical data, ticket sales, digital art online, private peer to peer financial actions, and real estate contracts.
The growth of these technologies is having an enormous impact on our world. Blockchain technologies are increasingly informing aspects of the financial and business sectors. As such, a thorough understanding of how these new financial ecosystems work will be crucial for anyone trying to grow wealth in the upcoming economy. Learning how to construct on ramps from analog business models to digital models will be an invaluable asset in building wealth.
Entirely new social networks will also be built on this technology as it allows for an unprecedented level freedom from traditional forms of censorship. This means regular people will have a level of freedom of speech and content creation previously unavailable online. As new global decentralized networks emerge it will be increasingly difficult for third-party entities to monitor or stifle user created content.
Blockchain Technology and Industry
Interest in blockchain technologies has expanded dramatically in the last number of years. As various sectors begin to adopt blockchain technologies, new skills and abilities will be required. Employees and entrepreneurs both would do well to begin acquiring knowledge relating to blockchain applications.
Some estimates predict that the demand for these skills has already increased by over 2000% since 2017. Given this trajectory, certification and training in the area will also be increasingly valued by employers. Organizations such as LearnDay, offer a full sleight of certifications in a variety of fields, including blockchain technology.
Many industries will be looking to hire those well versed in blockchain technology. Some industries likely to require these skills include, banking, oil and gas, accountancy firms, retailers, and social media firms. Independent start-ups will likewise need to build their skills in this area to reap the benefits brought about by these emerging platforms.
Governments will likely also begin to look at blockchain technologies and consider how they might be used in their work. Professionals that can advise governments on the ins and outs of blockchain technologies will also be in high demand.
Tech firms of course are already keenly interested in what blockchain technologies have to offer. While some may be weary of the decentralized nature of platforms, others will likely find ways to utilize their existing expertise to jump in and find ways to profit.
Computer programmers and developers will continue to be in high demand as blockchain technologies become more common in many industries. Creating applications for use with these emerging technologies will be essential. Those who already have expertise in these fields would do well to expand their knowledge base now to include blockchain technologies.
IT operations managers will also become highly sought after as they are already technically proficient, and industries will need to rely on their abilities to adapt to new blockchain solutions.
Business communications is another area of growth. Businesses and governments will likely need skilled workers with a high-level understanding of blockchain technologies. These people will be needed to help translate technical or complex data into easier to understand formats for those less technically proficient. Communications professionals working in many of the above noted industries would do well to seek out certification to develop further in their chosen careers.
As the implications of blockchain technologies have yet to be fully grasped, legal professionals working in the world of tech or finance will also be required to understand what impact these technologies may have for their clients. Most businesses beginning to work with blockchain technologies will need legal expertise to ensure they are working within any applicable legal framework, including any international law that may pertain to their operations.
Engineers, designers, entrepreneurs, business and system administrators, as well as business solutions architects will continue to be needed by most industries going forward. There are innumerable ways in which blockchain technologies will revolutionize our world and our global economy. Most sectors will be impacted in one way or another and as such, expertise, and certification in blockchain Tech will be invaluable going forward.
Free Introduction to Blockchain Course developed by professor and blockchain expert Dr. Justin Goldston.