Q&A on Blockchain Technology- Learning the Basics of Blockchain Technology
In this article, I go back to the basics and answer the most common questions I receive when I’m speaking about blockchain technology. What is the blockchain?
“The blockchain” refers to blockchain technology. There are thousands of blockchains in existence. A blockchain is a distributed ledger representing a virtual or online network operating via a system of consensus where by every transaction is verified by each node in the network which adds a block of data to the chain of information, hence the term “blockchain.”.
Like the World Wide Web (WWW) of information, public blockchain technology enables ledgers of value, distributed online so individuals known as “nodes” may download and verify the data on a computer, if their computer has the required space and power to do so. This applies strictly to “public” blockchains such as bitcoin or ethereum. “Private” blockchains may only be accessed by specified parties chosen by the creator or owner of the blockchain. An example of this is Ripple.
Why is the blockchain known as a trustless protocol?
A protocol is a mechanism by which a transaction or activity takes place. It is known as a ‘trustless” protocol because the network a public blockchain operates on is not owned by one person, entity or organisation.
Instead, it is run by the entire network that sustains it. In order to corrupt or tamper with the data or transactions, an individual would need to amend all copies of the transaction/activity that is in each node in the network.
How is data recorded on the bitcoin blockchain?
Every 10 minutes all transactions on the bitcoin network are verified and stored in a block which is linked to the preceding block thereby creating a chain. Each block must refer to the previous block to be valid.
This structure permanently timestamps and stores exchanges of value which prevents anyone from altering the ledger. If a person wanted to steal a bitcoin they would have to re-write the blocks in the entire history on the blockchain which is impossible.
How can blockchain technology address social inequality?
What is so fascinating about blockchain technology is that it can solve problems with growing social inequality because it is able to redistribute wealth and change the way wealth is distributed so almost anyone can share in the wealth being generated.
What does it mean when they say blockchain is ‘decentralised?’
Most transactions these days take place with organisations rather than dealing directly with the supplier of the product purchased.
An example of such an organisation is your local bank. They will store your data on their own computers. They own this data. As a result, they can also tamper with it and sell it. They also act as an intermediary or third party.
For example, when you buy a cup of coffee, the payment you make with your Visa card in your local Starbucks will go to the bank first. Then it will go to the coffee shop.
The bitcoin blockchain, in comparison, is not owned by one person or organisation. It is collectively validated by the network of nodes that run it. The network operates on a peer to peer model (directly from one user to another user). This means when a purchase is made on the blockchain, payments go directly to the seller and the user may receive his product/service directly.
What questions do you have about blockchain technology? Leave your comments below.
Written by Sukhi Jutla
An IBM Blockchain Foundation Developer, she made global headlines in April 2018 when she became the World’s First #1 Bestselling ‘Blockchain’ Author. She has authored two more books and is the co-founder of MarketOrders, the online B2B marketplace for gold jewelry and diamonds.
As a female tech ambassador, Sukhi is a regular keynote speaker and passionate about supporting female entrepreneurship. She is an IBM Blockchain Foundation Developer and her efforts have been recognized by a number of industry awards including the Asian Women of Achievement Awards, We Are The City Rising Stars Award, Management Today’s “35 Women under 35”; and listed as one of the Top 100 Asians in UK Tech.
In April 2018 Sukhi made global headlines when she became the World’s First #1 Bestselling ‘Blockchain’ Author. Named as one of the 50 most influential people in Blockchain.