A brief four minute read on what Blockchain technology is and just a few examples of the possible applications of the technology beyond cryptocurrencies.
Blockchain technology is generating a lot of headlines. You’ve probably have heard of Bitcoin and cryptocurrencies by now. It has attracted a lot of attention, but its capabilities extend far beyond that, enabling existing technology applications to be vastly improved and new applications never previously practical to be deployed. There is obviously a need for education on Blockchain topics. Since Blockchains are built by geeks it’s hard to get a good explanation about it without using words like “proof of work”, “secret key” and “cryptographic hash function”. I’m going to do my best to explain to you as best I can.
What is Blockchain?
Bitcoin and Blockchain are used by some to mean the same thing but that is far from fact. Bitcoin is a cryptocurrency that’s decentralized and allows users to exchange money across the network without the need for a middle man. The underlying technology that enables this is Blockchain. It ensures that all transactions are properly conducted and recorded. But what is stored on the Blockchain need not be a monetary unit.
A Blockchain is essentially a distributed database of records or public ledger of all transactions and consensus processes. The ledger is not owned or controlled by one central authority or company. Access, transaction accounting, issuance, rules, and policies are visible, known, and held by most or all the participants in the network. Virtually any type of information can be digitized, codified, and placed onto a Blockchain. In each transaction, the information is recorded into cryptographically protected blocks in the ledger, verified by the collective computing power of the participants of the networks (miners). Once entered, information cannot be erased and every single transaction ever made can be verified. This allows all participants to know for certain that a digital event happened by creating an irrefutable record in the ledger i.e. in a Bitcoin network, each time a transaction takes place, such as one party sends a Bitcoin to another-the details of the deal, time, amount, are added to a block. Blockchains can either be private (permissioned) or public (permissionless). Public allows anybody to use them (Bitcoin as a case study) or private creating a closed group of known participants working, perhaps, in a particular industry, institution, or organization.
The possible applications for Blockchain seem endless, as its underlying technology can be leveraged in virtually any field to perform a number of important tasks. Applications built on Blockchain technology could prove to be faster as they run on peer-to-peer protocol rather than the now “old” centralized internet protocol. Server downtime is no longer a problem. Below are just but a few of these innovative solutions that would work for our everyday problems.
Digital democratic electoral voting system
Current digital voting systems are plagued by trust and security issues. During this time of unprecedented talk of election rigging, Blockchain could prove to be a completely transparent and secure way to vote. Every single voter can cast and verify their ballot anonymously.
The ability to store and update property titles on a Blockchain could, for the first time, allow poor people to assert reliable title claims to their homes and use them as collateral for borrowing.
Digital identity management
Powered by Blockchain, this has the potential to change lives. This would allow them to assert who they are and access proof of their digital identity anywhere using a private key. Access to banking, healthcare, and authentication would be made easier. I.e. in terms of aid, in a camp like Dadaab, a person can have their identity verified by a Blockchain-based application then go ahead to make purchases at the camp supermarket and their spending deducted from their allowance.
In the words of Mdundo CEO Martin Nelsen “the industry should develop affordable and attractive alternatives to illegal downloads”. The Kenyan music industry is plagued by people who day and night take advantage of the blood and sweat of the hardworking Kenyan artist . Blockchain-based music streaming services can enable artists to set a price of which they receive 100% when a user streams their music. This will ensure that our artists get the most of their work.
Distributed cloud storage
All current services are centralized i.e. Dropbox. When you privately upload a picture to Facebook, you relinquish your control over this piece of data. All you have to rely on is their word to not leak this information. Well, with Blockchain, you don’t have to worry about the safety of your information, after encryption, your data is sent out to a network with easy-to-track basic metadata. This will decrease dependency and improve security.
The future of Blockchain is still unraveling. The disrupting power of Blockchain is still not well understood even among the tech community. In the future, harnessing this power, a lot of robust applications can be built on top of this technology other than the popular cryptocurrencies.