Imagine living in a world where people aren’t hostages of their government’s poor decision making. Where banks don’t get a free pass when they screw up (which is more often than you may think). Where corruption surrenders to transparency and free access to information. Lucky for everyone, and thanks to blockchain technology, that future is not far away. It is taking shape right now.
Table of Contents
What is a blockchain?
If you operate in crypto, there’s no way you haven’t heard this term before. That’s a good thing. But what is it? A blockchain is a unique data registry that is both consensual between its users and distributed through all of its nodes.
In other words, it is a type of database that stores information in every single one of its nodes, run by its users, which in turn govern it collaboratively. Or at least, that’s what it was. Blockchain technology has come a long way. Developers have come up with new solutions that pushed the blockchain to the next level. Now, they have evolved into more complex and diverse networks.
How does blockchain technology work?
Why is a simple data registry so singular? Blockchain technology functions in a way that enables everyone to safely access, secure, and trace data.
Every data block connects to the one before and the one after it (hence, the blockchain). They do so through a code called hash, which is unique to each one of them. Furthermore, blocks are unalterable and immovable (given that they all contain the previous block hash). Each node of the network holds the entire chain. That means that every single user safely stores all the information in their computer.
In turn, each network has what we call validators, responsible for creating the blocks that form the chain. Validators certify that blocks and their data are legit and accurate. They do so through different processes. Bitcoin network, for example, uses mining. Other chains turn to other methods, like staking.
Although it was known thanks to it, Bitcoin’s blockchain isn’t the only one. You can keep track of many blockchains using The Crypto App. Download the app here.
This type of technology goes way beyond data storage. If well developed, blockchains can become immense ecosystems. Financial applications, user interaction, even entertainment are only some of the possibilities. But what do we mean by “well developed”? Essentially, blockchains have key features that enable all these advantages. Let’s list the most important ones.
- Smart contracts: To make the process agile, developers compile a series of rules and procedures in the blockchain called smart contracts. They execute automatically and establish the conditions and terms under which users interact with the blockchain. However, they also enable some networks to be programmable, like Ethereum, BSC or Solana. That means that any developer can build their applications to run on these blockchains.
- Transparency: Blockchains have block explorers, which are an interface to surf through the data stored in each block and access all the information that ever existed in the network. Mempool, in Bitcoin’s case, or Etherscan in Ethereum’s allow anyone to check on the network’s fees and performance, but also to see every single transaction that ever happened. All data is available to everyone.
- Safety: The fact that anyone can access the registries means not only transparency but security. Imagine a hacker wanted to erase or forge a specific set of data in the blockchain. He would have to launch an attack in 51% of the network’s nodes (since every user holds a copy of the chain). Even if they are succesful, it would raise suspicion. Plus, if an attacker altered one of them, the chain would bifurcate, signalling exactly where the event happened.
All in all, blockchain technology allows us to store data and information that can’t ever be lost, forged or deleted. But it also enables us to build networks in which we can manage our money, interact with other people, collect art or even play games.
Real-world applications (besides cryptocurrency)
Do you see any use case for a secure, unalterable system to make the world and society better? You probably only heard about it in a conversation regarding Bitcoin or read about it in a cryptocurrency forum or blog, but it goes way beyond that.
How about the controversy around vote-counting after every single election? With this technology, you can trace every single vote from its issuance to the moment of the count. There would be no more frauds nor accusations. It would all be in the blockchain for everyone to verify for themselves.
Speaking of the government, we all know that there are things going on under the table that they don’t want the people to know. Funds embezzlement, corruption schemes, shady businesses. They would all fade away by implementing a blockchain-based system for government transparency.
Crime prevention and investigation would take a tremendous leap forward implementing the blockchain too. Financial crime and identity theft would be virtually impracticable. Document certification, preservation and integrity would be guaranteed and available for everyone. Every single transaction or document of any kind would be accessible without the risk of falsification or duplication.
It sounds like a distant utopia, but it’s not. We’ve got the technology. We’ve got the people. All we need now is the education that leads to mass adoption. It will probably be hard and expensive, but worth it.
The future is much nearer than we may think. It is happening right now.