What Is Blockchain And Why You Should Care

blockchain banner
What is a blockchain? When considering cryptocurrencies like Bitcoin or Ethereum, it's best to first understand the underlying technology and framework that makes their existence possible. At its core, a blockchain is a what is described as a "shared ledger" technology that is used to record the complete history of transactions that have been made. More importantly, this ledger cannot be altered in any way, making it ideal for historical analysis and peer review.

When it comes to everyday transactions -- be they financial, inventory or even account-based, traditionally, each party that is involved keeps a record of the transaction. Having these multiple ledgers can lead to discrepancies in transaction data and can eventually lead to errors and even fraud, down the line.

Since blockchain uses a single, distributed ledger for all transactions that take place, they are recorded, stored, and are unable to be altered by any affiliated party. In addition, all parties involved in a transaction must come to a agreement before a transaction can be committed to the network. Blockchains also have the ability to hasten the transaction process while cutting down on paper records. PCMag has a lot more detail on how blockchains work if you'd like to delve deeper.

So, what does a blockchain look like? Each transaction is put into what is called a block, which houses of a number of different pieces of information. In simple terms, each block contains a timestamp, references to the block that precedes it using a hashing function, as well as a record of all current transactions which can't be tampered with or modified, thanks to cryptography. This continuous cryptographic hash function is also the reason why GPUs are utilized for Ethereum and other cryptocurrency mining. Modern GPUs are incredibly adept at handling similar, repetitive and iterative operations, and the large number of on-board Arithmetic/Logic Units (Stream Processors, CUDA Cores, etc.) allow them to more efficiently validate a block of data in rapid succession. Multiple blocks are then strung together sequentially, and these blocks are continually added to each other, forming a -- say it with me -- "blockchain". 

blockchain 2

With a blockchain, there is no central authority that has to approve transactions (or set rules). That means you don’t have tech giants like ISPs or Google pulling the strings with regards to your data or tranactions. The decentralized nature of blockchain data means that there is no central point of failure, and it promotes transparency, since all parties involved can see information contained within. There is also a single, public ledger which reduces clutter, while blockchain can help reduce inter-bank transaction times, thanks to 24/7 processing for clearing and final settlement.

As a result, companies like IBM and Microsoft are using blockchain to better service their corporate customer base, while many businesses are using blockchain for financial transactions, and even in the medical industry for health/insurance records keeping. In short, it's not just for currency-based transactions, but generally any transaction.

But of course, this is just a small sample of what makes up a blockchain and why many organizations are flocking to it to help streamline operations and safeguard data. Again, for a very thorough take on blockchain, its history and its future, check out this article from PCMag

Images sourced from Wikimedia Commons