Updated: Oct 12, 2020
This piece of contribution is a reaction the feedback I received for my insights on blockchain technology. It is time to start from the basics again. I will start by answering the first question. What is blockchain anywhere? Our next contribution we shall cover the key concepts and glossary in blockchain
Now, what is blockchain anyway? Blockchain is a registry of assets and respective transactions. Such assets can be title of ownership, cryptocurrencies and digital currencies, certificates, contracts, real world objects personal data and tokens. Blockchain solves a problem of Finding consensus between a large number widely distributed peers and create immutable records.
Blockchain technology is an innovative technology which allows transfers of assets between two parties without a need for an intermediary and has the potential to make the world a more transparent, efficient, and effortless place. Its decentralised architecture facilitates to address the fundamental problems of transparency and trust.
The attempt to describe the blockchain covers the understanding and the definition of blockchain and the overview of its development from the birth of bitcoin in 2008. Blockchain is “a chain of blocks”, and blocks refer to a piece of digital information stored in a distributed ledger.
To better understand the importance of blockchain technologies, it is vital to have an overview of the internet, how it changed human lives. The internet has changed the perspectives of our lives from the way we communicate, work, play, learn, and so much more. The Internet created new industries such as social media which significantly disrupted the traditional media industry. The retail industry and e-commerce are another indisputable example. The Internet also takes credit for effective and low-cost communication and easy access to information. However, despite its vital contribution to the current society, the Internet is unable to tackle some fundamental human problems.
The apparent issues, such as software viruses, criminal hacking, online fraud, fake news, and criminal hacking, have reduced the trust among internet users. The loss of trust has created multiple inefficient intermediaries which cost money and time; and are susceptible to more risks such as corruption, human manipulation, and fraud. These problems which the internet has been facing needed solutions. Blockchain technologies emerged as a solution to many of the problems which the internet created. Blockchain technologies resolve two significant challenges that the internet is facing: trust and transparency. Blockchain technologies address real-world life problems; from political, legal, social humanitarian, scientific to economic initiatives.
Blockchain potentials have been inspiring constant developments and innovations. As a result, over time, Blockchain has known various updates from the bitcoin (currency, blockchain 1.0) to Ethereum (smart contracts, Blockchain 2.0).
Blockchain is an electronic ledger for records, events and transactions controlled by the users of the distributed network. The definitions of blockchain revolves around key concepts ranging from, decentralised/distributed ledger of transactions, encrypted and inalterable/immutable transactions, consensus protocol between the users, trust, and transparency.
Since its first implementations as a technology underpinning the Bitcoin cryptocurrency, in 2009 with the publication of bitcoin’s white paper by Satoshi Nakamoto, it attracted the attention of different stakeholders namely developers, investors, users and the public in general. Users interests and inspired developers to take the blockchain from just a cryptocurrency technology (blockchain1.0) to another level, blockchain 2.0 and blockchain 3.0.
The second generation of the blockchain technologies which embarked with the evolvement of Ethereum and smart contracts expanded the use of blockchain from financial transaction to other domain such as logistics, education, media, arts, supply chain management, legal and service delivery at large.
As Blockchain technology matures, they will be integrated with other emerging technologies such as Artificial Intelligence (AI) and Internet of Things (IoT) to boost the entire ecosystem.