Bitcoin and Blockchain and its purpose in digital has been widely debated for sometime now. Its current currency purpose means that eventually the 21 million Bitcoins (which have 80% already been mined) will run out, and if there isn’t a larger quantity released, the technology will surely be adapted and re-used in other industries.
Before we begin let’s get to grips with the basics.
What is a Blockchain and where does Bitcoin come into this?
Blockchain is a virtual chain made up of databased that are shared across a large network of computers. Once a record has been added to a block and then secured in a chain it is incredibly difficult to be changed or penetrated. This makes the block chain incredibly safe.
The network of computers is constantly checking to make sure that all the database copies across the network are exactly the same and if they are not the whole network will collapse and fraudulent activity can be traced. Once your transaction record is stored in a blockchain and sealed with the next blockchain in the sequence it is able to view if you are the record holder – but cannot be changed.
Blockchain has been used to create cyber currencies such as Bitcoin, however many other uses are emerging.
What is the point of Blockchain?
The point of blockchain is to make deals and transactions as transparent as possible. It brings an element of trust to the table and if somebody wanted to change a certain deal or agreement behind another first parties back by hacking into a record the hash code that sealed the blockchain would change to reflect the change inside the record. This then would change the following block on the chain and the blockchain would be broken allowing everybody on the network to see what has happened.
If somebody did do this, they would then have to race against the rest of the network to change the hashcodes of every other blockchain in the sequence to fix it. The reason that blockchain continues to grow and be secure is because of Bitcoin miners.
What are bitcoin miners?
Bitcoin miners are people who frantically try and work out the next hash code in the sequence. Their motives to do this is because each time you work out the next sequence of the blockchain, the miner is rewarded with a Bitcoin. As time has gone on this value has decreased but due to the increase in the value of Bitcoins worth the motive and incentive is still extremely high.
What else can this blockchain be used for?
Blockchain can be used for a lot of things in terms of transactional (which it is doing at the moment) to finding out where our food was from, who was the picker, who was the freight forwarder who transported it overseas and who’s house did it end up at. However, identities are completely hidden which makes the transactions/ events described only encrypted by those who know the keys of the person that the transactions/ events are in regard to. You also might see it when you purchase a diamond, which could be a good incentive for people to buy who don’t want to buy blood diamonds.
We’re more interested in the next example – Blockchain technology could be put in place for global businesses who can see every step of their supply chain and make sure things are going smoothly!
How can I get involved?
Anybody can join the network as long as you own the currency. You can do this by trying to guess the next number in a hashtag to a blockchain, you can buy it from reputable bitcoin sellers – which you can keep in a digital wallet or you can be gifted a bitcoin which will allow you to enter the network. Who knows your business may even adapt the technology at some point and you’ll be using the technology every day as a business solution.