What Is Blockchain Technology and Is It Just Used for Bitcoin?

It seems that everyone is talking about blockchain these days. Whether it is to do with Bitcoin or the technology itself, the popularity and awareness about these topics have shifted from internet tech forums to the mainstream public in a short space of time.

While most people will have heard of blockchain, a lot of them will be unsure as to what exactly this term means. While it is the underlying technology upon which Bitcoin is built, there are so many more applications it has for a wide variety of industries.

Where Did Blockchain Technology Originate From?

Blockchain technology was initially created for its use in Bitcoin, the first and largest digital currency on the market today. Bitcoin currently has a market capitalization of over $145 billion, and it has paved the way for hundreds of other successful digital currencies. Why did Facebook ban crypto ads?

The exact creator of the blockchain is still unknown as they used the pseudonym Satoshi Nakamoto when creating it. As Bitcoin became more popular and started to rise in value, it became known as “digital gold.” It didn’t take long for people to realize they could use this blockchain technology to create others forms of digital value.

While you don’t need to know the ins and outs of the blockchain to be able to use it, it is a good idea to have some knowledge of what it is and how it works. This is especially true if you are going to implement it into your business in some manner.

What is Blockchain?

The blockchain is a digital ledger that records economic transactions. It cannot be corrupted, and as it is open-sourced, it can be programmed to record anything of value and not just financial transactions.

In very basic terms, imagine a spreadsheet that has been copied many thousands of times across a large network of different computers. This network updates regularly as new transactions are recorded. It is essentially a shared database that is continuously reconciled.

There are many benefits associated with it. All of this data no longer has to be stored in a single place, as it is spread across a vast network of computers. This means all records are completely public and can be verified very easily. It is completely decentralized so no hacker can corrupt any part of this database.

Deloitte_How does blockchain work
How does blockchain work? Infographic by Deloitte

If you are still struggling to imagine the blockchain distributed ledger, think of the difference between sending someone a Microsoft Word document versus using a shared platform such as Google Docs.

When sending a Microsoft Word documents to another party, you have to wait for them to make changes and send it back before you can see the alterations and make further tweaks. With Google Docs, everything is done in real-time, with both parties having simultaneous access to these documents and any changes that are made.

This is an example of a shared document, with the blockchain being a shared ledger.

This is one of the reasons blockchain technology allows for more effective ways of doing business; changes are made and observed instantly.

What Industries currently use Blockchain Technology?

The main industry where blockchain technology is currently being adopted on a mass scale is the world of finance.

The blockchain is able to cut out the middleman in a lot of transactions, which means transaction times and fees will be lowered. There will also be one less link in the chain that can be attacked by hackers.  Cross-border payments are made a lot easier, and it is particularly useful for those in underdeveloped countries that may have limited banking access and who are dealing with a very weak fiat currency.

Many people are turning to using cryptocurrencies such as Bitcoin when sending money or making payments for goods and services. These currencies are not controlled by any central authority that can tinker with its supply and demand depending on their preferences. The low transaction costs and quick processing times are a great incentive.

There are more blockchain startups coming out every day, as well as many established businesses implementing blockchain technology into their current operations.

Healthcare is an industry with massive gains to be made through the implementation of blockchain technology. Patient data can be kept a lot safer by using the blockchain, as well as allowing medical professionals to share patient data in a manner that is safe and secure.

deloitte-uk-blockchain-blocktopus-infographic

The likes of pharmaceutical companies can significantly cut costs by implementing a track and trace serialization l system that is blockchain based when it comes to verifying various health and safety parameters.

The fashion industry can benefit greatly from the introduction of blockchain technology, especially when it comes to making the supply chain more streamlined.

The distributed ledger can help create a level of trust between trading partners, as well as between the consumer and the fashion company. Consumers can see the journey of a given garment from start to finish thanks to the blockchain. This can go so far as to see where the raw materials were sourced and what sort of labour went into the manufacturing of the garment.

The blockchain is a big topic of conversation and is definitely not limited to cryptocurrencies only, as you could see. We decided to divide this topic into a series of articles so we can go into depth on what advertisers and publishers need to know about blockchain technologies.

Next time, we will talk about what ICO is and how to promote your startup ICO using paid advertising. Stay tuned!