Jargon Buster: Blockchain Technology Explained

Blockchain is rather becoming a hugely popular technical terminology, and lately, thanks to the growing adoption of the cryptocurrency, Bitcoin, which it serves as a public ledger for all Bitcoin transactions.

While Blockchain is seen as the main technological innovation of Bitcoin, since it stands as proof of all the transactions on the network, but the first work on a cryptographically secured chain of blocks is dated back to 1991.

And the first Blockchain was conceptualized and implemented by Satoshi Nakamoto in 2008 as a core component of the digital currency Bitcoin, where it serves as the public ledger.

What is Blockchain Technology?

Blockchain is an open distributed database that maintains a continuously growing list of records, called a "block", secured against any form of alteration. The block is the ‘current’ part of a blockchain with records of recent transactions, which goes into the blockchain, once completed as permanent database.

The blockchain network lives in a state of consensus, and automatically checks in with itself every ten minutes, reconciling every transaction that happens in ten-minute intervals.

The ledger itself can also be programmed to trigger transactions automatically, with each block containing a timestamp and a link to a previous block.

What's the alternative implementations?

The Blockchain technology can be applied to not just a cyptocurrency like bitcoin, but also to any “asset” that can be stored or distributed such as software and physical goods, or even data.

It also has great potential for the financial services industry as well, as implementing a decentralized database or a public registry like blockchain to verify the identities of all parties to a transaction will mean settlement would be instantaneous since the transaction and settlement would happen simultaneously once the ledger is updated.

Albeit, the biggest use of blockchain technology is perhaps in identity management, as detailed in TED by Don Tapscott.

As online transactions are closely connected to the processes of identity verification, it's not hard to imagine that wallet applications will transform to include other types of identity management.

According to Don, blockchain technology represents nothing less than the second generation of the internet and holds the potential to transform money, business, government and society.
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