Due to the rise of cryptocurrencies, and more specifically bitcoin, the word blockchain frequently appears in the media. But what do these words have in common and what is this chain of blocks?!
In this article, we will explain blockchain, the underlying technology for bitcoin, and especially what its benefits are in our every-day lives.
To get an idea of how blockchain works, and why it is a veritable revolution – which could be extended to wider domains than just finance, let’s start with the online definition: “Blockchain is a growing list of records, called blocks, that are linked using cryptography.” It is hard to get a clear idea of what this technology is starting from there. Mathematician Jean-Paul Delahey uses a metaphor to visualise the concept more easily, comparing it to a huge ledger which is available for everyone to use, free of charge. Anyone can write in it, but it is impossible to erase or destroy anything.
To many, blockchain is the greatest revolution since the Internet. It is true that this technology can do what the Internet could never achieve. While the Internet allowed the decentralised exchange of information, we have never been able to do without platforms that served as a trusted third party when we wanted to transfer money online, for example. Blockchain solves this problem by eliminating the need for an intermediary. Currently, when one individual pays another at a sale, they use a payment platform that acts as a trusted third party to make sure the buyer paid the money owed. The platform takes a commission in exchange for this role. With blockchain, it is the computers of the network that verify whether the two users are trustworthy before validating the transaction.
Even if blockchain has been democratised by the rise of bitcoin and cryptocurrencies in general, the technology will only be a revolution of consequence if it can be extended to all sectors. And it can. In the future, blockchain can and will be used for drawing up contracts, issuing diplomas or making up a will. Numerous companies across the world are starting to focus on this technology to certify information and fight fake news more efficiently, as it is everywhere these days, on the Internet and on social media. You may have gathered that blockchain is certainly a revolution which will require a huge training effort from IT staff and developers, to allow them to master the technology as well as possible, for all economic and consumer activities to benefit from on a daily basis!