Beginners Guide for Blockchain: Unlocking the Secrets

1. Beginners Guide for Blockchain: Unlocking the Secrets When people first heard about blockchain, many were quick to dismiss it as another buzzword that will soon fade to oblivion. Years later, however, blockchain technology remains to be the talk of town and its users’ voices are getting louder, meriting more focused attention on what is said to be one of the most critical innovations in the digital world. Blockchain in its simplest terms is the infrastructure behind bitcoin and all other cryptocurrencies. It is the foundational system that keeps cryptocurrencies sound and secure by providing complete transparency over transaction histories all the while making sure that they cannot in anyway be tampered with. Initially, the blockchain served as a public ledger where bitcoin transactions were recorded. Today, many other cryptocurrencies are pushing the limits of the technology while financial institutions and governments explore its adoption in various other applications. The blockchain was introduced to the world by the anonymous bitcoin creator, Satoshi Nakamoto. He described it as the underlying technology on which the digital currency would run. Bitcoin, a decentralized currency—which is not controlled or owned by any single entity and could not be stored or kept in a central location—requires a public database that is made available to all bitcoin users. This way, every user can keep a copy of the data, hence promoting transparency across the bitcoin network. Since the introduction of blockchain technology, it has evolved into something much, much greater than its inventor has originally intended. In fact, many entities are exploring the possibilities of using blockchain in fulfilling important roles like establishing identity, recording transactions, and establishing contracts—roles that have been traditionally in the hands of the financial services sector. This is why blockchain and cryptocurrencies are considered hue disruptors in the financial services industry, but one that offers massive improvements in its efficiencies. Blockchain in its most basic sense is a public ledger that contains information about transactions. Although its original intent was for keeping track of bitcoin transactions, blockchain technology is now being explored and developed into a system that can monitor all kinds of transactions, ranging from records and contracts, as well as digital representations of various physical assets. The decentralized nature of the blockchain is what sets it apart from common types of centralized databases by providing every user with a copy of all transactions within the network so that if one user decides to tamper with the data, all other copies would be able to disprove the corrupt ledger.