December 18, 2017

What is blockchain, and why does it matter?

Debora Pesci

Blockchain is a hot topic, and has become increasingly more dominant in the tech world during the last few months. But: what is it, and why does it matter? Digitalization changes the way people interact. These new interactions require new technologies: nowadays, transparency and cybersecurity have become essential for success in innovation.  Blockchain, in turn, fulfills this need for transparency and security. In this blog, we’ll dive into what blockchain is and why it matters.

Blockchain future

What is blockchain?

Blockchain is a decentralized connected system of blocks. In other words, it is a network of nodes, where every node is a computer. The interesting thing about this system is its decentralization: this allows us to, for example, share documents or transactions without control of a central authority. Unlike centrally organized systems, every node of the network is a blockchain administrator.

How did it come to be?

Blockchain was created originally for Bitcoin, the world’s first and most famous digital currency. However, nowadays it’s used for improving any kind transaction, as it allows to virtually distribute and share value. In today’s world, where we spend a large part of our money online, this is essential. Blockchain’s usefulness today reaches far beyond the world of cryptocurrency: it provides a decentralized way to register or share almost anything.

Why does it matter

Essential to blockchain is its decentralization. This is also what makes blockchain important: no central version exists. This prevents losing data, data being hacked, or fraud. Contrary to centralized systems, every record is updated in every node instantaneously and simultaneously. That means that every computer created its own updated version. In addition, this system is incorruptible because the nodes are connected through a secure validation mechanism.

On top of this, transparency of transactions contributes to the importance of this network: because it’s public, it is instantly verifiable. For poorer countries with corrupted governments, this could be a game-changer as it makes corruption and fraud near-impossible.

In short, blockchain enables general optimization of different transactions as well as money’s saving.

What’s in it for the near future?

We can try to paint a picture of what blockchain’s near future has in store. It is no surprise that we expect growing usefulness of blockchain technologies in both everyday life and commercial activities. Blockchain technology has the potential to revolutionize several aspects of business. The world is becoming increasingly more globalized, and this is reflected in international collaboration requiring new levels of online security. Because of its general applicability, the possibilities are almost endless. To give you an idea, we’ve listed some possibilities for the near future:

  • It enables a switch to a more public type of record keeping, which makes fraud much harder (if not impossible!), and allows a way for governments to keep transparent records.
  • Stock trading would work without intermediaries. In other words, it would allow peer-to-peer execution. This would increase efficiency of trading and would make it instantaneous.
  • The general data management can benefit from this decentralized and distributed network because it would allow the direct management of personal online data.
  • Speaking about the security of blockchain, it offers exciting opportunities for better identity management, resulting in, for instance, more secure online financial transactions as it offers better methods to verify identity. This creates new possibilities in online banking.
  • In everyday life, blockchain makes smart contracts possible. Smart contracts are simple contracts that do not need an intermediary.
  • Blockchain allows also the exchange of money without the government’s or banks’ control. The most well-known examples of this are of course cryptocurrency, like the famous Bitcoin.

Blockchain and your career

Blockchain is popularizing at a high speed. As a result, gaining the skills required to work in the field set you up for an exciting future. Demand for blockchain developers is increasing, and there are many vacancies unfilled already. As more institutions implement blockchain technologies, your career chances improve.

Are you aspiring a career in the exciting field of Blockchain?

Register on Academy Cube and start learning today!