We’ve touched briefly on blockchain technology in our previous lessons without going into explicit detail.
A blockchain is a decentralized distributed ledger that is written, replicated and synchronized by members of its network. Subsequently, they are also collectively responsible for its direction, updates and longevity.
Disagreements in updates to the ledger can lead to a fork, depending on the depth of the disagreement. The contents of a blockchain cannot be altered once written unless by network consensus, forcing all participants to upgrade.
We’ve used the term ‘distributed ledger’ a number of times throughout this lesson. The term is not common outside of cryptocurrency but can be broken down into two parts that make it easier to understand.
As we’ve already discussed, a ledger is historically used to document incoming and outgoing transactions for a business. This mirrors the blockchain’s core concept.
The ‘distributed’ part explains how the information is created and viewed. Information on the blockchain is broken up into unencrypted data, encrypted data and hashed data.
Encrypted data is transparent to users who have the relevant decryption key. Finally, hashed data is used to prove who and when a block was created - as well as providing evidence on whether or has since been tampered with or not.
The most obvious benefit to blockchain technology surrounds the ability to create an unalterable ledger of transactions that are created by its users. This results in a secure ecosystem of transactions that are paid for and operated by its users.
Working as a ledger, a blockchain cannot be altered unless a clear majority of its network consent, leading to longevity and security for its users.
Think of the blockchain as a typical business ledger that records incoming and outgoing transactions. A paper or spreadsheet-based solution could be open to suffering from incomplete information or tampering from third parties. Blockchain technology solves such issues and creates a secure and open environment.
Blockchain technology has an almost infinite number of use cases, both to individual users and to enterprising businesses. While many ICOs and other blockchain-wielding new businesses are tech or crypto-focused, that isn’t necessarily always the case.
The security of blockchain allows for a host of business opportunities, including decentralized universal health records, group investment funds and financial services. Not to mention the thousands of people who have earned money from mining coins, lending their computing power to the ecosystem and confirming blocks.
As with our health records suggestion, blockchain technology - along with cryptographic keys - can offer new insight into digital ownership. By using private and public keys as a digital signature, we are able to confirm and implement transactions on the blockchain. In our idea, patients would be able to give medical professionals their public key, who in turn would be able to access the relevant medical history.