Rather than the electronic currency per se, it was Blockchain technology which enabled the transactions to take place that stole the limelight
Everytime we write about Blockchain we get a vertical spike in our readership. In our highlighted news stories this week, the National University of Singapore (NUS) has teamed up with IBM to offer a course on this subject, allowing students to get to grips with the technology behind what is set to be one of the most highly disruptive technologies of our age.
Blockchain is inexorably linked with Bitcoin, a crypto currency that arrived on the scene in 2008, which allowed direct peer-to-peer electronic cash transactions without the need for an intermediary such as a bank. However, rather than the electronic currency per se, it was Blockchain technology which enabled the transactions to take place that stole the limelight.
In a nutshell, Blockchain is a digital ledger of transactions, agreements, and contracts; a means of storing data that needs to be independently recorded and verified. However, rather than being a centralised depository, this ledger is distributed across many, going into thousands of computers around the world.
These digital records are held in blocks, and joined together cryptographically and chronologically into a chain using highly sophisticated algorithms.
Encryption, also known as hashing, is carried out by multiple computers and if they all agree on an answer, each data block is given its own unique digital signature. Once data is updated, it can’t be changed or tampered with. The hash can’t be taken back to the original data.
The beauty of Blockchain’s decentralised nature is that it is very difficult for any cyber security breaches, as hackers would have to access every copy of the database at the same time in order to do so. In the way that e-mail is just one application that runs off the Internet, currency is just one application that Blockchain can perform.
Cutting out the middleman and creating trust between strangers is the Blockchain way and it is being adopted across a number of areas. In the music industry, cutting edge companies like Mycelia, founded by Grammy-award winning artist Imogen Heap have developed intelligent songs with smart contracts built in, enabling the artist to sell directly to a consumer without going through a label, tech company or financial intermediary.
There are many other industries where Blockchain is going to cause mayhem – financial services, healthcare, the public sector, voting, energy and resources.
It will, in short, change life as we know it.