Blockchain revolutions seem to be in its full swing. Within a single year, Google search regarding ‘blockchain’ has increased by more than 200%. Recently, there was a public discussion regarding the prominent applications of cryptocurrency by the U.S Senate. Today, a wide number of public entities make use of the word blockchain to gain attention and hype.
A blockchain can simply be described as a transaction ledger, which prevents tampering of previously written information that is stored in the form of blocks. In this regard, cryptography is used for the linking of the new blocks to the ones that existed before it.
Blockchains are primarily driven by consensus. This means that it involves a wide number of computers connected to a single network. This makes it virtually impossible for an attacker to add transactions, or to modify any transactions to the network.
Before the blockchain came into being, it was not possible to validate the ownership and to secure transactions regarding digital assets. For instance, any single central party such as Microsoft could enforce its right to deny access to MS Word or other programs, to anyone who carries a license. Similarly, it would also have the right to transfer permissions to other users if it wanted. While Microsoft is considered as a highly trusted authority, the risk of such fraud and illicit activities can increase in the case of an untrusted central party.
This is a risk that will significantly be reduced by blockchain technology. It is the very first technology that has made it possible to transfer digital ownership in a trustless and decentralized manner.
In this regard, consider the example of a valuable asset such as a share in a company or digital artwork. In order to transfer the shares of a company, currently, stacks of paperwork, and a trusted entity such as the NY stock exchange is needed.
It is not difficult to get sucked into the unreal hype of blockchain technology, considering the fact that this technology is the fast growing one in the world. However, it is important to know that blockchain also has its own practical limits. This means that it cannot possibly be used for every other business, especially those in which transaction malleability is a big requirement.
A perfect example would be the case of medical records. This is where blockchain technology may further complicate things rather than adding any value.
The supporting technology around blockchain is also expected to evolve quickly, and there is no doubt in that. As a result of which, the potential of applications will also evolve. This will result in better consumer awareness regarding the benefits of blockchain, along with a more supportive community in the near future.Published: Jun 18,2019 05:30:00 PM IST