Blockchain 2018: What is blockchain technology and how does it work? – Express.co.uk

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Blockchain 2018: What is blockchain technology and how does it work? – Express.co.uk

Veteran business strategist Don Tapscott argued in a 2016 TED Talk that blockchain had arrived to forever shape the future.  

Blockchain may have been around since the inception of bitcoin in 2008, but the technology did not really hit significant levels of mainstream awareness until almost a decade later. 

Mr Tapscott said: “The technology likely to have the greatest impact on the next few decades has arrived. And it’s not social media, it’s not big data, it’s not robotics, it’s not even AI. 

“And you’ll be surprised to learn that it’s the underlying technology of digital currencies like bitcoin. It’s called the blockchain. 

“It’s not the most sonorous word in the world, but I believe it is now the next generation of the internet.”

What is blockchain?

Blockchain is a distributed peer-to-peer leader which facilitates the recording of transactions and assets on a business network. 

Today blockchain is most commonly recognised as the underlying network on which bitcoin transaction are made.

But the reality is that virtually anything with any intrinsic value can be tracked on the blockchain. This includes money, property and even less tangible concepts such as patents and copyright.

Blockchain was the brainchild of the anonymous bitcoin creator Satoshi Nakamoto, as a means of transferring the cryptocurrency. 

But the bitcoin blockchain is just one of many that have been since created, Mr Tapscott said. 

Some of the biggest and most popular blockchain protocols around today include the Ethereum network, the Ripple Transaction Protocol and R3.


Blockchain technology: Bitcoin, Ethereum, RippleGETTY

Blockchain was created as the network on whcih bitcoin was transferred between parties


How does blockchain work?

The way the network operates is by utilising daisy-chained blocks of data which record and verify every single transaction that occurs. 

Each block contains a hash – a digital fingerprint of sorts – as well as timestamped batched of recent blockchain transactions.

The technology likely to have the greatest impact on the next few decades has arrived

Don Tapscott, Business strategist

These are all linked together to prevent any outside tampering and strengthens the verification process when assets are moved.

Richie Etwaru, adjunct professor of blockchain management at Syracuse University in New York, believes the technology surpasses the ledgers that are in use today. 

The crypto expert said: “The blockchain ledger is an epic upgrade on the ledger we have today. There are a couple of things that are very interesting about it. 

“The first thing that is interesting about the blockchain ledger is every record that is written on a blockchain ledger has a unique key that goes with it. 

Blockchain technology: Bitcoin and other cryptosGETTY

Blockchain technology facilitates the movement and recording of asset transactions

“Now you don’t need to get into the details of cryptography or hash keys, just trust me when I tell you that there is a really really awesome unhackable key that is in every key on a blockchain ledger.

“The other thing that happens to blockchain is that every record is written and stamped by the trusted party that wrote that record.”

In the shipping industry for example, blockchain ledgers are used to streamline cargo shipments which require multiple sign-offs, cutting down on an otherwise endless trail of paperwork.

Shipping giant Maersk was one of the first companies in March 2017 to adopt this technology, and has since partnered with IBM to develop a new blockchain for this purpose.

Blockchain networks can also be used for the execution of smart contacts – scripts which are automatically carried out when the right conditions are met.

Mr Tapscott explained: “It’s a contract that self executes, and the contract handles the enforcement and the management, and the performance and payment of agreements between people.

“And today on the Ethereum blockchain there are projects underway to do with everything from creating a new replacement for the stock market, to creating a new model of democracy where politicians are accountable to citizens.”

There are a variety of blockchains with their own unique twist on the technology, which for the most part come down to private and public ledgers. 

Public blockchains allow anyone to see and send transactions on the ledger as long as they are part of the network’s consensus protocols. 

Private blockchain meanwhile limits the ledger’s writability to one company or group of businesses and their employees.

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I'm a pretty simple, fallible man who loves God, family, and being a better man than I was yesterday. I'm into technology, finances, politics, and a couple hobbies.
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