As our world grows ever more connected, digital and virtual, new opportunities and possibilities emerge for collaboration, innovation, and communication. However, at the same time, the problems of cybersecurity and hacking also grow.
Our current internet of information is based on a process of exchanging data by means of copies. If I send my friend a picture, she receives a copy of that picture and not access the original one on my phone. She can edit her copy or delete it as she likes, it doesn’t affect my original version. This means that the picture I send her doesn’t have any value as it can be copied an infinite amount of times.
Blockchain technology changes this as it prevents the creation of copies. When I send something through a blockchain, I open up access to the original file to the person I’m sending it to. Suddenly the file has value. There is only one of its kind and everyone who has access to it, sees it in exactly the same way, meaning 100% transparency. You can compare it to a google doc. Everyone you invite as a viewer to your document has access to exactly that document. They can see the content of the document and the changes that get added to it. That creates the internet of value.
This enabled the birth of Bitcoin, the most popular cryptocurrency out there at the moment. Before blockchain, it was hardly possible to create a virtual valuta, as such a system could be hacked and manipulated by other people. But now transactions have become 100% transparent, making a decentralized and 100% virtual currency possible.
How does Blockchain work?
Blockchain got its name because it is a chain of data blocks. Each new block in the chain is connected to the other blocks through the information contained within those previous blocks. Anyone who has had access to one of those blocks can see the changes that are taking place within the chain. That means that you need to get access to all computers who have ever been in touch with the chain in order to manipulate it unnoticed – and that is pretty impossible. So you will know for sure that the information you are receiving is true.
It also means that transactions can take place without banks. Usually, we need a bank as a go-between when we buy something online. I don’t allow the store to take the money from my bank account. I ask my bank to send it to them. If the store claims that I haven’t paid, my bank can prove to them that I have.
With blockchain, the information of my transaction is transparently visible to both me and the store online in the chain. Neither of us can claim anything else, nor can we hack the system to manipulate the data because it is stored in all of the blocks in the chain. That means that banks are no longer necessary for trustworthy transactions.
If that didn’t make sense to you, don’t worry: Blockchain is complex. Perhaps this video helps you understand it a little better.
How can Blockchain technology be used?
Apart from enabling crypto currencies, blockchain also opens up to many new opportunities, for example the following:
- We can trace food and goods through the whole production process, so we know exactly where things are coming from. In the case of scandals and food poisoning, we would know the culprit or the fuck-up immediately.
- We can vote online at elections and count the votes at once. It would be impossible to fake someone’s vote while still keeping every vote anonymous. Blockchain was successfully used for this in Sierra Leone in 2018.
- We can build a safe and secure internet of things. It would be impossible to connect every device with each other and create smart cities if those devices and cities could be hacked.
- Blockchain can help to build transparent donation systems to ensure that each donation gets to the right destination. According to the 2019 Edelman Trust Barometer [PDF], which surveyed more than 33,000 people across 27 territories, just 56 percent of people globally trust NGOs. The decentralized nature of many blockchains can help narrow the trust deficit between givers and organizations.
The Future of the Internet
Some call it the Future of the Internet, and there is definitely some truth to it. The way we pay, store our data and trust each other will be directly influenced by blockchain technology. So we recommend getting your head around it sooner rather than later 😉 #daretolearn.