Blockchain is the number-one trend worldwide. Still, there is a lack of understanding of this technology among regular people, as they are used to considering it from the perspective of cryptocurrency. However, the Blockchain concept goes well beyond the digital currency marketplace and bitcoin exchange.
Most of us have heard key phrases such as: decentralisation, no third party, autonomous, peer-to-peer. Although, many people do not have a keen insight on how in fact everything actually works. Let’s learn the ropes and figure out, whether blockchain is a far-reaching and ambitious concept or a hyped falsehood.
What is blockchain in simple terms?
Like the Internet, Blockchain technology deals with information, but it takes it to a whole new level. So, from now on, you have to understand that everything can be perceived as information, even money. (For example: Bitcoin, the first of its kind cryptocurrency, in terms of which blockchain was implemented for the first time, is no more than a piece of digital information that has a certain value that you own.)
Now, let’s try to piece things together and go through the ‘key phrases’ again. Blockchain is:
- A technology, on the basis of which a certain network can be designed. This network differs markedly from any other networks we recently had, because...
- It is decentralized. (For example: any website is hosted on a server, that means it is centralized.) Blockchain network, on the contrary, is allocated among tens or hundreds of thousands devices worldwide that ‘process’ the network. In this regard...
- It doesn’t require a third party. When it comes to valuable information, a third-party service is, commonly, required to be the guarantor of the security of this information. Due to the fact that blockchain is allocated and transparent, trust in its network is, simply, not necessary. It is impossible to steal something or fool someone in full public view. Blockchain is endowed with this ‘public view mechanism’, where every single participant has...
- A peer-to-peer access. That means that everyone within the network has absolutely equal rights. There is no one, with a higher level of access, who is able to dictate rules to the lesser. In fact, that is another aspect that describes decentralisation. The ‘ruling power’ is never monopolised, but equally distributed among all users.
The difference between Blockchain and the Internet
Have you noticed that both of them are written with a capital letter? It’s all because we are talking about unique technologies. After all, more than 20 years ago, the Internet was only a technology and now it has transformed into something everyone uses in everyday life.
What do we do with the help of the Internet?
What do social media such as Facebook, Twitter or YouTube offer to us? We all use them to share some information: news, photos, videos, music. If you watch someone’s video on YouTube, you technically see a digital copy of the original. The same happens with the rest of information.
What does blockchain allow?
Basically, the same, but there is one vast distinction. It also allows storing, sending and receiving information that has value, such as Bitcoins. But, let’s make an easier example: You have a song and wish to post it on some website, so that people could buy and listen to it. From this moment, we can say that the song on the website is a piece of digital information that HAS value. That’s why you use a third-party service that will be responsible for it. They keep track of your piece of art, so that no one could listen or download it without paying.
Blockchain allows you to do this without an interference of another entity. A peer-to-peer access allows you to send your song directly to the listener, while he, ‘by himself’, pays you money - as if both of you are standing next to each other and do ‘the exchange’. This exchange of information is valuable for both parties.
Data storage makes our living
Have you ever thought what it means when we possess something? In society, we actually own things only if we are able to prove ownership of them. We have car registrations, property documents to prove that we own certain physical things. Moreover, we have a driver's license to prove that we have a skill that allows us to drive a car. All this is useful information that allows us to make living in society. Hard to argue that one.
So, is blockchain the future of data storage?
Would the answer “definitely yes” surprise you? Anyway, it is true. For many people who got the idea of Blockchain, it is still hard to admit that this technology is revolutionary and will actually change our communication in a better way.
For the record: In this context, the word “communication” not only implies verbal or nonverbal contact, but any cooperation of people who give or exchange information, which, as you may now understand, can be almost anything.
Blockchain is cheaper
Nowadays, many people use cloud services to store their data. It’s free until you reach a certain memory limit. After that, the price can reach up to more than $100 per month. Today, there already are some Blockchain-based services that can be used for the same purposes, although the price is, generally, 10 times less.
Blockchain industry is already here
There are hundreds of companies that work with decentralized technologies. Barclay’s is only one of the major world Banks that are currently working on implementing Blockchain in the banking sphere.
There is an enormous amount of Blockchain startups, some of which have already gained huge success. In fact, one of the most extensive lists about the top ones is available on the blog of CEX.IO - UK-based cryptocurrency exchange.
One of the most crazy ideas that is already put in practiсe and successfully works is combining the AI (Artificial Intelligence) program with the blockchain network - SingularityNet. The most human-like robot Sophia is linked to this network. Seeing how she ‘works’ and speaks is just astonishing.
As you can see, the future is not even tomorrow, it is today. While decentralised networks and, namely, Blockchain play one of the most, if not the most, significant part in it. The technology is at the initial stage of development, however there is no doubt that in the near future, it will make interaction between people faster and cheaper.
About the author
As an expert on Bitcoin-related topics, Mary Ann found herself as a Journalist at Cex.io - cryptocurrency exchange. She is currently working on articles related to blockchain security, bitcoin purchase guides or bitcoin regulations in different countries.