You might have heard about a bunch of new currencies that have cropped up in recent years; they don’t belong to a central bank and are known as cryptocurrencies. Perhaps the most known cryptocurrency is Bitcoin, but what is it and how does it work? It is a decentralized banking system that uses a technology known as blockchain to ensure the safety of those who chose to trade in cryptocurrencies. But what is blockchain and how exactly will it change the world?
Blockchain allows digital information to be passed around but never copied, which means that people’s transactions cannot be used for data unless agreed upon by the person themselves. Blockchain was originally created to ensure that the Bitcoin cryptocurrency would keep everyone’s data and spending habits private, unlike what happens when you make purchases through regular banking systems. Thanks to blockchain technology, the Bitcoin currency has been valued at almost $9 billion. The technology allows for the recording of incorruptible data, programmed to track financial transactions and can be used on basically anything of monetary or intellectual value.
No central storage
One of the greatest strengths of blockchain technology is that the data is not all stored in one place. Rather it is stored within a network of locations to ensure that the records are public and verifiable. This information doesn’t have a singular place of storage, meaning that a hacker cannot come along and mine the data, or corrupt it. This means that information stored via blockchain can no longer be controlled by one single person, company, or country. Additionally there is no single point of failure, so anytime there is an error in the storage of data it is due to malicious involvement rather than a failure of the system. Currently central databases are open to both malicious interference and failures within their systems.
The internet of things
So what will the world look like if blockchain is globally accepted and implemented? For starters, the internet of things will happen sooner rather than later. The internet of things is a concept where all of our devices are connected to one another, seamlessly integrating into our lives. Picture a typical day, you get up, make coffee, then head to your car and drive to a meeting. With all of your devices talking to each other, your wake up alarm can set itself, communicate with your coffeemaker, so it’s freshly brewed when you go to the kitchen. Your calendar can interact with your car, and your GPS will already be taking you the quickest route to your meeting, getting you there with time to spare. Blockchain technology will protect people’s servers getting hacked through their kettle which won’t have the robust protection software that a computer or smartphone might have.
Because the data is available for everyone to see, there is complete transparency in the information that’s out there. Governments in the future could end up sharing all of their data which means people can make informed decisions about who to vote for based on accessible facts, rather than listening to the spin and false promises given by politicians when looking for your vote.
Blockchain technology has been working for ten years already and is proving to be a successful alternative to traditional data storage methods. It protects the data from hackers and keeps records open and honest, removing the worry of corruption. It will force future businesses to be completely wide open about their practices, allowing people to make a conscientious decision when choosing to make a purchase with a company.