Blockchain, the word creating a lot of head turns in the field of technology and business. From tech giants to startups, the technology is spreading like wildfire. Tech giants presenting it in their earning call while the startups are harnessing its potential to form a transparent operating system in every sector.
A standard definition for the technology is a little bit confusing, and it can get complicated with all the industries it can improve. There are different types of Blockchains, but the more known one is the technology that is backing up the operation of bitcoin. It was introduced to the world in 2009 and most of the altcoins are performing with the help of Ethereum network.
When people mention the name the technology “Blockchain” they are referring to a broader space technically know as Distributed Ledger Technology (DLT), there are even some DLT’s that are lesser known and are not definitely not decentralized. Ledgers by Ripple and Hyperledger are some examples of it. Blockchain may be the front face but the hidden technology really is DLT.
A digital ledger that is distributed to all the users and the name Blockchain comes from how the information’s are added to the block connected by chains. Like a giant excel sheet used by many users at the same time and every time an entry is made it is clearly visible to all the users using the sheet. Likewise, Blockchain is a ledger that’s distributed across all the computer networks that record all the changes for the users to see.
The changes made to the ledger are known as “Smart contracts” when it comes to the blockchain backing bitcoin transactions, smart contracts carry out only the monetary transactions.
You should know smart contracts
Smart contracts are automated programs that run on the surface of Blockchain; smart contracts are laying the foundation stones for Blockchain to transform every industry. In the year 2015, the Ethereum network demonstrated a sophisticated operation involving smart contracts. That was the first stone laid which told the world that Blockchain technology can be useful for all the industries and it proved that currency trading was just a sample of what the technology is capable of. This can easily overcome the difficulties faced by the traditional system where the data of the past are difficult to trace back. To put in a simple manner, bitcoin is a decentralized bank and Ethereum is like a decentralized computer.
Transparency in the giant computer
At present, there is not much and it is one of the big hurdle blockchain developers are facing, a complicated computing system where millions of people can access it simultaneously takes a lot of processing power and time. “Peepeth” an alternative app for Twitter, sort of a decentralized Twitter. If you need to send a peep then it can take up to a day and the process involves buying and spending tiny silver tokens. The most popular one ever based on Ethereum is called “Cryptokitties”. Its kind of like pokemon, you can buy a kitty, nurture it and breed it with another and then you can sell it to other parties. The game was a huge hit in 2017 that it almost shut down the entire Ethereum network.
It is believed that until the scaling problem of blockchain is solved then the technology with huge potential will remain only in the niche market.