I’ll assume you’ve already heard about Bitcoin since you’re reading an article on this cryptocurrency-related website. But do you know how does it work? It’s based on a blockchain which is an public ledger for transactions that is resistant to tampering and changing data by anyone. How’s that possible? It’s quite simple in principle but very complex to achieve.
This article was written by Erik Baker, Brand Manager of OneHash.
When you make a transaction with Bitcoin it creates a record that is saved on a blockchain forever. There are thousands of computers spread around the world called “nodes” that keep the copy of a blockchain and are always connected to the network with other nodes ensuring that every copy of the ledger is up-to-date. So as you can see the whole idea is nothing hard to understand, but it’s quite complicated to achieve. It is vital for a lot of people (in this case) to take part by donating their computing power for the good of the network.
This system is decentralised which ensures that no one can change the ledger to cheat the network and steal Bitcoins.
So we’ve established that the blockchain is an excellent system for Bitcoin or any other cryptocurrency. But can it be used anywhere else?
Well yes, in fact it can prove to be very useful in many fields, so let’s take a look at the most relevant examples. You may have heard about banks taking an interest in the blockchain technology. Essentially they want to use it for the same purpose Bitcoin use it – to ensure the safety of transactions and speed up the process of interbank and international money exchanges. There are test being carried by around 40 financial institutions interested in this project. I recommend this source for further reading on the matter further.
Another field that could benefit from the blockchain technology is the art business. Creating a public ledger of ownership for works of art could seriously restrain selling stolen art, as the ownership would always be easy to find and transferable only by the rightful owner. And if you think it wouldn’t work, well it actually does work already with diamonds due to the work of a company called Everledger.
These are just a few examples and you can find plenty more on the internet (real estate market is a good one) but I believe that we are only limited by our imagination. Any business/institution that revolves around any type of ledgers, records or rights of ownership could benefit from implementing a version of this idea tailored to suit their needs. It will help them work more cost and time efficiently and decrease tons of paperwork or even lawyer fees occurring in some cases.
Featured image courtesy of Coinfox.info
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