Learn the basics to understanding blockchain

Blockchain, at its core, is just a different way to store information. You can think of a blockchain as a really complicated Excel spreadsheet. Individuals can input data into multiple fields and create hundreds of lines of data. Each of these lines is hardcoded into its specific location through an equation. Changing any data at all whether it’s data within the line, the location of the line or anything else will cause an error in the equation.

This is, in essence, what blockchain does. Each block on information is placed in a specific place within the blockchain. Each block is also hardcoded both for the location in the chain as well as the data contained within the block using advanced cryptography. Any attempt to alter the data in any way will break the chain, and the chain will be easily visible as corrupted.

The primary security precaution that blockchains use in order to ensure that the information contained in it is not tampered with, is keeping identical blockchains at hundreds of different locations around the world. This way, if one computer gets their data changed, all of the other computers will see that as an error or corruption of the data, and actively correct it.

The way this works in practice would be as follows: computers A, B, C and D are all operating off of the same blockchain which is maintaining records of car accidents. A car owner wishing to sell his car at a better price, goes into blockchain A, and deletes an accident that happened last year. Once this change is made, every block of information that follows immediately becomes corrupted. The next time someone attempts to add information to the blockchain, computer B, C, and D will look at each other’s information in order to authenticate the new block. B, C, and D all see that their information is the same, while all locations see that A’s chain is broken. A will therefore look at the majority of blockchains that are the same, and copy them, thereby fixing its chain.

It is through this method of constant checking, that blockchains are able to consistently maintain their authenticity, and provide trust to users, so that they can be certain that the information contained on them has not been tampered with in any way.

The benefit of blockchain is clear. Companies like Berkshire Hathaway, IBM, and Oracle have already begun instituting blockchain tracking or blockchain offerings to be able to provide additional accountability and transparency. Using blockchain themselves, or by offering it to their clients, these companies, using blockchain, will be able to verify absolutely where their product is coming from, and where it is going.

This relatively new technology (or at least new to the mainstream) of blockchain has already began to drastically change the way many industries track their data, such as shipping, healthcare and real estate, as can be seen above. And as the technology evolves, more industries will be striving to find their place in it.

The currency of the future will be trust, and blockchain will be one of the only platforms able to provide it.