Introduction to Blockchain

16 October 2018 | Tue

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Blockchain technology works like a distributed ledger, where every participant in the blockchain holds a copy of the ledger. Since the ledger is distributed, no one person can control or tamper the information present in the ledger. This makes the blockchain a secure decentralized distributed ledger database.

In blockchain, all the information is stored in a block. To add new information to the blockchain, a new block is created and this block will be validated by people in the blockchain network (also called miners). Once the block is validated, it will be added into the blockchain.

How Does It Work?

A blockchain stores information permanently across a network of personal computers. Therefore, making it impossible for one person or organization to control or manipulate the data.

In a blockchain, data is stored in a “block”. A block acts as a page in a notebook. All data are recorded in a block. Once the block is full, it gets processed, validated, and then added to the blockchain.

You can think of a blockchain as a Word document, you can view it and add data to it, but you cannot change the information that’s already been added in the past. One of the most important features of blockchain is the security it provides to the data stored. Each block in the blockchain is connected to all the blocks before and after it. This makes it very difficult to tamper the information in a single block.

Blockchain technology also utilizes cryptography as a means of protecting the identities of users and ensuring all the information is secure. Cryptography provides for secure communication in the presence of malicious third-parties, known as adversaries. Encryption is a major component of cryptography. Encryption uses an algorithm and a key to transform an input (i.e., plaintext) into an encrypted output. Only the person to whom this output is sent will be able to convert the encrypted output into a readable text.

The blockchain is best known as the foundation for cryptocurrencies, but the distributed ledger technology can be used in an array of applications, Let’s explore examples of how blockchain technology is applicable today.

How the Government can use Blockchain?

Even with some governments opposing cryptocurrencies, it has been observed that all governments are supporting research in Blockchain technology and encouraging blockchain technology because blockchain can reduce bureaucracy, increase security, efficiency, and transparency of government operations.

Dubai is aiming to put all it’s government documents on the blockchain technology by 2020. Dubai government estimates that by adding visa applications, bill payments, license renewals and other documents to a blockchain could potentially save 5.5 billion dirhams (£1.1 billion) annually in document processing alone. It could also cut CO2 emissions due to trip reductions and redistribute up to 25.1 million man-hours of economic productivity.

Charity

The most criticized aspect of charity is the ambiguity of donations because most information is not made public. Blockchain technology can be the antidote with regards charity. The transparency of blockchain technology ensures that donors are clearly aware of the flow of their funds. Furthermore, blockchain ensures that financial information cannot be tampered with and the anonymity behind a transaction protects the Donor’s privacy.

It is also possible to introduce smart contracts at the bottom of the blockchain technology so that the rules for the use of donations are already written before the donation, which ensures that the funds are earmarked, and public donated funds will only be given to those who meet the conditions of the charity. With transparent record keeping and public viewing of distributed funds, blockchain technology can help bolster global charities with the aid of a more generous public.

Voting

Over the years, the struggle for power has highlighted the shortcomings of the existing electoral methods, and some of the existing electoral systems have even been accused of fraud and corruption.

Since the emergence of blockchain technology, it has been hailed as a potential for a reformed voting system because of its unchangeable nature and high transparency.

Blockchain technology can be applied to voter registration, identity verification, and electronic statistics to ensure that only legitimate votes are recorded and that votes are not tampered with or removed. This has the ability to create an unchangeable, publicly visible voting record book. It can make elections more fair and democratic.

Healthcare

The USA is exploring a number of distributed ledger applications. In January 2017, the Food and Drug Administration (FDA) announced it had signed a two-year joint-development agreement with IBM Watson Health to explore using blockchain to securely share patient data. The collaboration aims to address the lack of transparency and security in health data processing and began with a trial on oncology-related data. This allows for the sharing of medical information with multiple healthcare providers without the risk of any privacy breaches.

Conclusion

We are gradually understanding the potential of blockchain technology and how it can disrupt various industries in the imminent future. There is no doubt that blockchain technology is the next big thing after the internet. Therefore it is imperative for every organization and government to understand blockchain technology and their implications. Blockchain has the potential to change our way of life as we embrace a more transparent, equal and an automated digital world.

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