What the Heck is Blockchain?
What the heck is BlockChain Technology?
If you turn on any financial channel (CNBC, Fox Business, Bloomberg) or pick up a tech magazine, Blockchain technology is a hot topic. It is the tracking system behind the Cryptocurrency but that is not it’s only use.
If you’re like most and you’ve heard the hype, you might be tempted to seize the opportunity to forge a competitive advantage. Trust me, as technology visionaries behind a number of applications, it is something we think about frequently. Before I lose you, this is not going to be a techie / geek article. Keep reading and next time NCIS, Blacklist or Criminal Minds talks about it, you will be more in-the-know.
Every startup company today has to evaluate if they have a BlockChain value proposition. Before you do, it’s important to understand the basics of these emerging technologies, including any potential risks.
Cryptocurrencies, like BitCoin, needed to have a way to secure transactions without a central governing authority. Meaning, Bitcoin does not have a CORE BANKING application. For Bitcoin to be decentralized, as it was promised it would be, there needed to be a way to confirm payments and prevent people from double spending.
BlockChain was the ideal solution as it acts as a digital ledger by recording information like the details of the sender, the receiver, and the transaction amount. Each transaction is recorded and stored in blocks, which are then linked and secured via an encryption technique known as cryptography. A new block is generated and added at a set regular interval and once data has been entered, it cannot be altered or changed. Thus, you ensure it cannot be forged by recording the same blocks on thousands of computers.
By design, BlockChain is incredibly secure as each block contains a hash or unique digital fingerprint of all previous blocks. Once data has been entered, it’s nearly impossible to corrupt or alter it as the data of every copy of the ledger on every network and every preceding copy stored in the chain would have to be changed. Security is further enhanced by the fact that BlockChain is not stored on a single server or controlled by a single entity, making it impossible to hack.
BLOCKCHAIN USES BEYOND CRYPTOCURRENCY
Blockchain’s ability to protect data makes it suitable for securing any type of information – not just cryptocurrency payments. Some companies are already using BlockChain technology to create smart contracts, send international payments and much more. There’s also the potential for applications to achieve more efficient international supply chains, land registration, social networks, centralized financial systems, and more.
IS BITCOIN SAFE?
While BlockChain is extremely safe, that doesn’t mean that cryptocurrency is completely immune to cyber-attacks. Hackers love to target the people who have BitCoin to access their digital wallets or the exchanges. For example, hackers stole over $530 million in virtual assets from digital exchange Coincheck in January 2018. When a theft occurs, most digital currency exchanges are unable to reimburse the lost funds. Digital wallets are a safer way to store cryptocurrency as they are harder to hack. You need to make sure your computer is very secure.
Due to the current trend of people losing their data to ransomware and companies paying out millions in BitCoin to recover their kidnapped data, the value of BitCoin seems to be holding strong.