Published on April 25th, 2018 | by Sunit Nandi0
Blockchain, Cryptosecurity & Cybersecurity
If you’re part of the general population, you’ve probably heard about blockchain technology or read about it on various tech blogs but may still be wondering what it is exactly.
In layman’s terms, it’s a means by which cryptocurrency, like bitcoin, is recorded and stored. Blockchain is also described as a public digital ledger where transactions occur.
Blockchain made its debut as the mechanism behind the cryptocurrency bitcoin, a digital currency system that resembles the real world cash system. (To be clear, bitcoin is a digital coin, and blockchain is a digital, distributed and decentralized ledger or database.) Today, blockchain is the framework for many types of future business transactions.
Because blockchains rely on distributed ledger technology (DLT), there is no middleman like banks or credit institutions, making it easier to transfer money and eliminating the possibility of leaks and compromised data.
Infographic credits: G2Crowd
“It offers a totally different approach to storing information, making transactions, performing functions, and establishing trust, which makes it especially suitable for environments with high security requirements and mutually unknown actors,” according to an article in Forbes.
Let’s look at a few analogies that might make blockchain more digestible. One comes from the author of “The Business Blockchain,” William Mougayar, who basically says that if you can understand Google Docs, you can understand blockchain.
In the pre-Google Docs era, the traditional way of sharing an online document was through a Microsoft Word doc. You would “collaborate” on a Word doc with someone by sending it to them to make edits. You’d have to wait for them to send it back to see the edits because you are locked out of editing it until the other person was done with it.
“That’s how databases work today,” Mougayar explains. “Two owners can’t update the same record at once. That’s how banks maintain money balances and transfers; they briefly lock access (or decrease the balance) while they make a transfer, then update the other side, then re-open access (or update again).”
But with a Google Doc, multiple users can view and edit a document at the same time. It’s like a shared ledger, so to speak, which is essentially what blockchain is. Blockchain instantly updates changes for everyone to see at the same time. In any arena where businesses need to collaborate on documents, blockchain could be used.
Mougayar said two entities like banks spend tons of time and money on coordinating, synchronizing and double checking to ensure transactions are happening the way they are supposed to — as is the case when one customer transfers money to another.
According to an article in Medium, “With the blockchain, a single ledger of transaction entries that both parties have access to can simplify the coordination and validation efforts because there is always a single version of records, not two disparate databases,”
Another analogy by Blockgeek says to imagine that a spreadsheet is duplicated thousands of times across a network of computers. Then, this network is designed to regularly update the spreadsheet. There is no central location, making it harder to hack. The information is public and verifiable. The information is instantly reconciled within the database.
Digital currencies and money transfers aren’t the only applications for blockchain. For entities that work with transactional infrastructure, such as electronic voting, patient health records management, and digitally recorded property assets, blockchain technology is worth a look, especially as we keep moving toward IoT and the ever-evolving role of blockchain tech in cybersecurity.
Eloquently put by IoT For All: “The reality is that blockchain is more of a foundational technology. It’s the security infrastructure on which bitcoin – and indeed, all cryptocurrency – is based. But its potential goes far, far beyond that.”