What is blockchain technology?

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Blockchain, the new bubble? Often people synonymously associate blockchain with Bitcoin and this is a real shame because blockchain is more than Bitcoin. A more concerning matter is that people  are buying Bitcoin without having any idea of what blockchain technology actually is and how it relates to Bitcoin.

Blockchain can get complicated but for the purpose of this article I am going to keep things simple with the risk of over simplifying. Let’s start with how blockchain even came about. It all started with the unknown Satoshi Nakamoto ( his pseudo name) who published a paper that proposed the idea of blockchain technology. It was around 2008 which is a significant time in history to remember, because it marks the crash of the real estate bubble and one of the worst economic crises since the depression. Also it is well characterized by movements like “occupy wall street” and public opinion that was no longer trusting of banks and other financial institutions. No longer trusting of banks Satoshi Nakamoto suggested a new type of technology that  allows us to make transactions without the needs of interference from a third parties like banks. This idea always existed, but there was one problem prior to Satoshi Nakamoto’s paper there was no way to secure transactions. Therefore there was no way to make sure that the seller would receive the money once they delivered the product or the service to the buyer. 

This is when the introduction of cryptography came about. Cryptography ensures that the transaction can only be completed once both sides of the party of have met their side of the bargain. Through the application of game theory the nodes in the node network are validated and checked.

Cryptography  can be a bit tricky to undersand but the main thing you need to understand about it is that it secures all transactions to make sure both parties to a deal exchange the agreed service or product with the agreed amount of money. Satoshi Nakamoto put his theory to practice and introduced Bitcoin, the first digital currency and the first introduction to blockchain technology. Funny enough its firsts introduction to the world was on the dark web and was being put to good use by drug dealers.

Bitcoin however moved from the dark web to being exchanged on the Chicago Mercantile Exchange and no one knows if that was an entirely good idea, because Bitcoin and other digital currencies are considered to be in a bubble.

Regardless to whether or not digital currencies are in a bubble or not, blockchain technology isn’t in a bubble. The next time you have a discussion with someone about Bitcoin, you can say this:

“Bitcoin is a digital currency that was introduced through blockchain technology. Everyone thinks Bitcoin is a synonym for blockchain technology, but that is really foolish because with the same logic we could use cow as a synonym for milk. Blockchain technology is really advance technology that allows us to store data and keep track of the records of all the data (no records can be deleted, only amended). Also all the data is secured through cryptography. One of the well know uses of blockchain technology is to build digital currencies, but blockchain technology has a much wider application.”

Blockchain technology’s incredible ability to store data and keep track of all records is revolutionising and can be used to the medical field to store data , it can be used for civil service to issue grants and yes it can transform the financial industry.

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