New technologies emerge every day. Now there are new, better and easier ways of getting things done. Every century comes with a transformation. In the 21st century, for example, we view the internet technology as the most important transformation.
Its emergence became a platform for innovation, which has completely transformed our societies and economies. Today, the world stands on the edge of a technological revolution that is still unfolding. We’re now witnessing the Fourth Industrial Revolution (4IR), which is an assemblage of cutting-edge technologies.
According to PwC Global, blockchain is one of the Fourth Industrial Revolution (4IR), technologies taking root in businesses, financial institutions, governments, and almost every industry. It’s the underlying technology behind bitcoin; a peer-to-peer digital currency.
Blockchain is not Bitcoin.
There’s a common misconception about bitcoin and blockchain. Bitcoin is the first practical application of this innovative technology, and its success, as a result, has attracted top firms and companies to the technology behind it. Today, there are many practical use cases of how we can utilise blockchain technology and the list keeps growing. To help get started, this post provides a basic introduction to the concept of blockchain, its meaning and how it works.
What is a blockchain?
Blockchain is a distributed digital ledger (like a database) that uses software algorithms to record and verify valuable information ensuring decentralisation, transparency, and security.
“Blockchain and Bitcoin is a remarkable cryptographic achievement, and the ability to create something that is not duplicate in the digital world has enormous value” — Dr Eric Schmidt (former Google CEO).
In a simpler term, we can describe blockchain as a digital way of keeping In a simpler term, we can describe blockchain as a digital way of keeping records. The information recorded on the blockchain can be transactions, contracts, personal data, movement of goods, properties such as land, cars, houses. Blockchain records information in the form of blocks which occur in a linear and chronological order, chain-linked using cryptography. Which connects the blocks to each other in the form of a long continuous chain using cryptography. Thus, the name ‘blockchain’.
What are the features of blockchain?
Decentralisation, transparency, and immutability form the core features of this innovative technology. Let’s take a brief look at each of their various meaning as related to blockchain.
First, in blockchain, decentralisation means no central server or central authority. Many governmental organisations and companies in the world are operated by a central authority. They design these platforms to operate in a centralised way. Which means they store data and other information in a central server which can be vulnerable to attack.
But with blockchain, the storage of information is not done by one entity, but everyone in the network owns the information.
Second, blockchain stores, information immutably. which means they are tampered-proof. This is because blockchain operates in a distributed way, across a network of computers called nodes.
A node in the blockchain network acts as an administrator. They are all equal. Every node receives all copies of data recorded on the network, avoiding any form of fraudulent activity. So for any changes to take place, the nodes that make up a blockchain network must come to a consensus. This makes it nearly impossible to hack through the network.
Third, the blockchain is transparent. The pieces of information recorded on the ledger of a public blockchain are open for all to see. All the information such as date, time, the value sent or received is displayed on the network.
Also, blockchain is secured using cryptography. For example, bitcoin, which is the first application of blockchain, secures its transaction with a digital seal. Interestingly, the blockchain does all of this process with no third party.
How blockchain works.
To boost understanding, let’s look at how blockchain works. Using remittance, If we apply a use case of blockchain such as cryptocurrency to the Africa remittance market, the cost of sending money home will become cheap.
For instance, an uncle of yours who lives abroad wants to send you $100. The traditional third-party money transfer options such as Western Union, MoneyGram takes a longer time (some even days) to process such transactions and charges high transaction fees.
There is no assurance of the complete $100 reaching your end because of a lack of transparencies and security. But, when we use a blockchain-powered platform, in this case, the whole process becomes easier, faster and cost effective.
With blockchain, for example, using bitcoin all your uncle needs is your public address to send you the $100. With your public address, you can send and receive any amount from anywhere in the world in an almost instantaneous process.
Once a transaction between two individuals occurs. It gets validated and included in a block by miners. With bitcoin; we refer the nodes as miners. Each time they confirm and include a transaction into a block, they’re rewarded with little incentives for performing this role.
The rise of blockchain applications.
This is just a glimpse of what blockchain we can use for. The potential the technology possess is promising, and it can arguably have a similar impact on the internet. And can solve many problems and challenges faced in our continent.
The technology is taking root across some major industries such as finance, agriculture, education, supply chain, real estate, banking. Countries like Malta, Estonia, Singapore, and the United Kingdom are fast becoming a global hub for blockchain-related businesses. The government of Dubai, for example, plans to include all of her government documents on the blockchain by the year 2020.