If you have been paying attention to finance, investing, or cryptocurrency over the last decade, you may be aware of “the distributed ledger,” the record-keeping tech behind the Bitcoin cryptocurrency and Distributed Ledger Technology.?
In trying to conceptualize blockchain, you’ve probably come across an explanation like this: “blockchain is a distributed, decentralized, public ledger.”
The distributed ledger is an especially hopeful and revolutionary technology because it helps reduce risk, stamps out fraud and conveys transparency in a scalable approach for endless uses.
Based on a peer-to-peer (P2P) topology, blockchain is a distributed ledger technology (DLT) that allows data to be saved worldwide on thousands of computers – while allowing anyone on the network to view everyone else’s entries in practically real-time.
Anytime a block records new data it is joined to the distributed ledger. Blockchain, as its term implies, is comprised of various blocks attached together.
One of the uttermost concepts in blockchain technology is decentralization. No single mainframe or entity can own the chain. Instead, it is a distributed ledger via the nodes connected to the chain. Nodes are any sort of electronic processor that manages copies of the crypto currencies ledgers and keeps the network opertaing.
Every node has its own transcript of the blockchain and the network must algorithmically verify any freshly mined block for the chain to be updated, trusted and verified. Since distributed ledgers are transparent, every action in the ledger can be freely reviewed and inspected. Every contributor is provided a different alphanumeric identification hash number that displays their transactions.
In a decentralized system, the data is not kept by one single entity. As a matter of fact, everyone in the system have rights to the data. As such if you desired to collaborate with your friend then you would be able to do so directly without going through a third party. That was the main ideology behind Bitcoin. You and only you alone are in charge of your capital. You have the ability to send your digital currency anywhere you choose without having to use a financial institution.
Immutability, in the context of the blockchain, means that once any data has been entered into the distributed ledger, it cannot be ever changed. Can you imagine how important this will be for banking institutes? Imagine how many embezzlement cases can be nipped in the bud if people know that they can’t “cook the books” and mess around with company accounts.
As a web infrastructure, you don’t need to fully understand the distributed ledger for it to be able to be deployed in your life. As of right now, finance provides the best use cases for the technology. Nation to nation remittances, for instance. The World Bank estimates that more than $430 billion US in dollar transfers were sent in 2015. The distributed ledger potentially removes the middleman for these types of transactions.
Ian Khan, author and Technology Futurist said, “As revolutionary as it sounds, Blockchain truly is a mechanism to bring everyone to the highest degree of accountability. No more missed transactions, human or machine errors, or even an exchange that was not done with the consent of the parties involved. Above anything else, the most critical area where Blockchain helps is to guarantee the validity of a transaction by recording it not only on the main register but a connected distributed system of registers, all of which are connected through a secure validation mechanism.”
It should be plain as day that blockchain will have a dominant function in creating our destiny. Right now is the time look into the future of blockchain and start laying aside a crypto-based nest egg.