Blockchain: The Future of Digital Information
A couple of weeks ago we investigated cryptocurrencies and some of there biggest short comings, but what about blockchain the underlying technology? The concept of blockchain can be very complicated which is why I want to take time to dissect it. The first thing we need to do to understand the blockchain is to separate it from cryptocurrencies.
We often think these two things are synonymous, but they are not. Cryptocurrencies are just one instance of what the blockchain is capable of. Virtual currencies have actually been around since the 80’s with little success. The blockchain may seem very new but the underlying concept is not. The concept was first created in 1991 to timestamp data. It may also be hard to believe but the white paper inventing the blockchain is almost 10 years old. Satoshi Nakamoto first released the plans to a cryptography forum October 2008. Although these plans were to create bitcoin they contained the concept of blockchain. Satoshi Nakamoto did not see that he had created something much bigger than virtual currencies with the invention of the blockchain. The process he adapted from D. Bayer, S. Haber, and W.S. Stornetta, to time stamp data could be used for so much more than just virtual currencies.
To simply sum up what the blockchain is, it’s a way to verify information in way that can’t altered or be manipulated after it has been verified using a network. Verifying the authenticity of information could prove to be vital to the foundation of the internet. Blockchain is a truly revolutionary concept that’s progress is hindered, the potential is endless for secure, reliable, transferable information.
The functionality of blockchain is a fairly uncomplicated process, think of the blockchain as exactly that, a chain of blocks each connected to the one in front and behind it. A block represents information and the chain represents how each block is connected to the other blocks. The information contained in the block is defined by the blockchain. For instance, a hospital may put information such as patient’s names, medical history, and prescribed medicine for individual patients in a block of a healthcare blockchain. This information is linked to the surrounding blocks with cryptography for an extra layer of security.
Each block in a blockchain contains data from the previous block. This data is a unique code created by cryptography. Because blocks contain information from the previous block, if a block was changed the blocks after the changed block would show something was wrong, as they contain different codes than the affected block.
Blockchain also deploys something known as consensus. This consensus means that a majority of computers on the blockchains network must agree on each block before it is put in the chain. Agreeing on a block means the computers check the information in the block as well as its unique code to guarantee that it is correct. Once its verified it is added to the chain. Keep in mind this is an extremely simplified model for a most basic understanding of how a blockchain works. In essence this is what a blockchain is and what IBM is doing to change how we share information.
IBM is leading the way in blockchain innovation. With solutions ranging from health care to food services, we’re seeing several creative solutions spanning multiple industries ever changing data requirements. IBM is proving that the blockchain has limitless potential beyond just cryptocurrencies.
Blockchain technology added with current database architecture could change how we store and interact with data. One such way IBM is doing this is with healthcare. IBM has created a blockchain network for health care institutions to connect to and interact with. This blockchain makes it easier to keep patient records between institutions, assess costs as a fee-as-value model instead of a fee-as-service model. By decentralizing health care information, they can increase data availability, add transparency and trust to the process and, make the process more efficient.
There are so many different use cases for blockchain technology. This technology provides endless possibilities, blockchain could enable us to share electricity with neighbors, prove ownership, prove identity, ease shipping processes and more. We need to stop focusing on cryptocurrencies and the blockchain together as these are two separate entities. Blockchain is a method of storing and sharing information, while cryptocurrencies are another virtual currency doomed for failure. Warren Buffet once said, “In terms of cryptocurrencies, generally, I can say with almost certainty that they will come to a bad ending.” It is time we focus on the future and other ways we can use blockchain to improve our lives.
