Blockchain technology is growing at an incredible pace. The market value of the blockchain industry was $708 million in 2017 and could reach $60 billion by 2024. That’s pretty impressive growth for only seven years.
What is blockchain technology and why is it growing so quickly? Let’s take a look.
A Brief History of Blockchain
The first work on the basic theory behind blockchain was in 1991. It wasn’t until 2008 that the theory was put to practical use. This is when Satoshi Nakamoto created the first blockchain. This is a pseudonym and it isn’t clear if it’s a single person or a group of people but the technology was the basis for Bitcoin.
Many people think of Blockchain and Bitcoin as being one and the same but that isn’t the case. Blockchain is the underlying technology behind Bitcoin and many other cryptocurrencies but it has many other applications beyond these.
What is Blockchain Technology?
Blockchain is a secure way of sending and receiving information across the internet. That information can take many forms, including:
- Purchases and other transactions
- Personal information such as health records
- Ownership records, such as property titles
When a transaction happens, a “block” gets created that contains all the identifying information. That block gets added to the “chain” which is a database of all the related transactions or information.
When the block gets created, it includes something known as a hash. This hash gets calculated using the information in the block and is unique to that specific block of information. Even if another identical transaction were to take place, it would be at a different time so the hash would change.
Each block contains the hash for the previous block in the chain as well as its own so there’s an “audit trail” that ensures the information is valid. Each block uses the previous one’s hash as part of the calculation for its own so if someone tried to change the information at some point in the chain, it could be identified immediately.
What Makes Blockchain so Secure?
Based on the above explanation, someone could change the information at some point in the chain and recalculate all the blocks that follow. That would be true if there was only a single instance of the blockchain but the designers had a solution for that.
Blockchain is a distributed technology, meaning the chain gets copied to many different computers across the internet. In some cases, such as Bitcoin, there are millions of copies. Someone would have to find a way to change all those instances of the blockchain to change the information at some point in the chain.
The sheer amount of time and computing power that would take keeps that possibility from ever happening.
The Future of Blockchain
What is blockchain technology’s future? Many industries are looking at ways to implement blockchain technology, from banking to governments. This is what has made the industry go from under $1 billion to an expected $60 billion in less than a decade.
Don’t be surprised to see blockchain implemented in many areas of your life. You won’t need to be a technical wizard to use it. In fact, you may not even realize it’s happening. But hopefully, this brief explanation will make it seem less intimidating when you do come across it.
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