From crypto to decentralization, the blockchain is all over the internet these days 🤳. The blockchain idea was first put forth as a research project in 1991, long before Meta was a twinkle in Mark Zuckerberg’s eye. Since then, the introduction of numerous virtual currencies, decentralized finance (DeFi) applications, non-fungible tokens (NFTs), and smart contracts has led to explosive growth in the use of blockchain networks, blockchain wallets, blockchain projects, cryptocurrency exchange, and ledger technology. But if you’re wondering, “what is the blockchain anyway???” you’re not the only one!
Fortunately, we’re here to save the day 🤩! In this article, you’ll learn what the decentralized blockchain that everyone’s been talking about is as well as how it’s being used right now. So close that dialog window and focus for a second; we’re about to solve that mystery for you once and for all.
What Is the Blockchain Anyway?
Here are the basics: a blockchain serves as an electronic database for storing data in digital form. You can think 🧠 of it as a chain of computers that, between entire networks of machines, form a shared distributed database. You might also hear this referred to as a ledger. A blockchain basically serves as the basis for immutable ledgers, or records of transactions that cannot be changed, removed, or destroyed on a public or private network.
The Decentralized Blockchain
A blockchain saves data in blocks (Get it?? Blocks?) that are subsequently connected to form a blockchain. But the genius of the blockchain public ledger system isn’t the blocks 😃; it’s the fact that a blockchain fosters confidence without the necessity for a reliable third party, thus eliminating the need for a third party/babysitter/overlord.
That secure and decentralized record of transactions 📋, built on tons of computing power, is behind the success of cryptocurrencies like Bitcoin and Ethereum. Blockchain is at the heart of Bitcoin transactions, for example, because it ensures that no one user or organization has power. Instead, all users collectively maintain control over their financial transactions instead of a central bank.
How the Blockchain Works
It’s as easy as 1-2-3:
- Each new piece of data forms a new block.
- The block is filled with information and is attached to the block before it.
- The data are chained together ⛓ in chronological sequence.
Although other kinds of information can be maintained on a blockchain, a transaction digital ledger has so far been its most popular use. You’ll find ledger blockchain projects all over the web, from legal contracts ⚖️ to the cryptocurrency market. Blockchains are also referred to as distributed ledger technologies because of this (DLT). They are a decentralized ledger of all transactions across peer-to-peer networks.
How Are Blockchains Used?
Naturally, blockchains are all over web3 projects already. For example, in the cryptocurrency market, more than 10,000 digital currency systems are currently active on the permissions blockchain (either on private blockchain networks or public blockchain networks). Another great example is blockchain games 🎮, including VR games with serious buying power.
However, familiar household names are also getting in on the decentralized ledger. Walmart, Pfizer, AIG, Siemens, Unilever, Nestle Oceania, Amazon Managed Blockchain, and numerous other companies have already adopted blockchain solutions as a business standard. For example, Amazon Managed Blockchain networks adopted the open-source hyper ledger fabric to make it easy to join public networks.
IBM and the Food Trust
Here’s a great example of innovative blockchain adoption. IBM developed the Food Trust private blockchain to track food as it traveled to various destinations. Why do this 🤔? The food sector has had numerous E. coli, salmonella, and listeria outbreaks as well as the unintentional contamination of goods with dangerous substances. Brands may follow a food product’s journey using blockchain records, from its origin through each stage along the way to its delivery.
Just like that, food contamination can be traced back to its original location thanks to blockchain adoption. This could help 🤝 companies conduct internal audits and find contaminations faster. This blockchain adoption could potentially save lives!
Criticism of the Blockchain
That’s not to say the fair market thinks this new digital business 👩💻 standard is all sunshine and rainbows. The blockchain has received critics from some sectors, including the bank for International settlements. Banks claim, unsurprisingly, that real currency cannot be replaced by a capital asset like cryptocurrency.
Some believe that many in-house blockchain solutions are nothing but cumbersome databases. Others point to potential security issues 😨, such as fraudulent transactions caused by a bad actor on the blockchain. However, despite the criticism, It’s no longer a question of if legacy organizations will take to blockchain adoption. Key market signals agree at this point: it’s a question of when.
A Blockchain-Based World
The blockchain is finally establishing itself as a digital business standard 🤖, and not just in the Bitcoin network. With several real-world uses for the technology now being implemented in digital business and researched amongst financial institutions, blockchain is the buzzword on everyone’s lips. That goes to include blockchain games.
As the blockchain matures, NFTs are becoming more and more prevalent, digital assets are being tokenized, and real currency and other capital assets are finding their way into digital wallets. The use of the blockchain in libraries is being considered in internal audits. Where will the blockchain ledger lead us next 🤑?
It’s best to jump on that bus before it leaves us behind with outdated blockchain alternatives. So, stay updated with recent information on blockchain technology, virtual currencies, and other web3 news by signing up with Ian Corzine’s newsletter!