Blockchain what is it?
Blockchain has been called the greatest invention since that of the internet. More and more companies are exploring the possibilities of this technology to store data and transactions safely and efficiently. What is Blockchain and what can we expect from it?
Blockchain is a new kind of database in which transactions can be stored. These can be all kinds of transactions. In one case it concerns payments with a digital currency, in the other it concerns important data that 2 parties exchange, such as contracts, diplomas or title deeds.
They have one thing in common. They become blocks of information that are digitally ‘signed’ by both parties. Without the intervention of a third party and they are directly stored in the database.
All information is stored encrypted in Blockchain using cryptography. Digital payment methods that use Blockchain technology – such as Bitcoin – are therefore called “cryptocurrencies”. All transactions are stored in blocks in a large network of computers. A new block always contains information about the previous block, which in turn contains information about the previous block. This creates a long, unchangeable and uncrackable information chain.
Most traditional databases are centrally organized. This means that there is one location where all data is stored. Only there data will be changed and shared with users. With Blockchain it is different: there is no central point, but there are several nodes (computers) that all contain an exact copy of the database. These nodes are also called ‘nodes’.
With Blockchain there is therefore not one owner or supervisor, as is the case with normal databases. The supervision lies with the users themselves. New transactions are stored in the database by the “nodes”. To do this, they must first find a code that indicates that all information is correct. The nodes must “agree” that the code is correct. Only then will the information be stored in the chain.
No one can therefore save or change information in the database on their own. This makes it impossible for malicious parties to make incorrect transactions or manipulate data.
Blockchain is an ‘open’ technology that can be used for many different applications. This means that anyone who masters the technology can build their own Blockchain database for their own application. You determine a so-called protocol. A set of rules that the database (and its use) must adhere to. This is how various blockchains are created.
One of the advantages of Blockchain is that it can replace clunky paper contracts and documentation with secure and smart electronic documents. This can make many processes more efficient.
All changes in the database are automatically copied to all computers. The system is therefore not dependent on one central database. This means that there is not immediately a big problem if something happens to one of the nodes.
If one of the computers in the network is hacked or the power fails, there are always the other “nodes”, each with their own copy of the database. That makes it safer than systems with a central database