Built for Blockchain
In my previous blogs, I have mentioned the utilization of BlockChain with several cryptocurrencies(Dogecoin and Bitcoin) but I would like to explain how this information storage unit works and its applications beyond the world of cryptocurrencies. As bizarre as it may sound, Blockchain was conceptualized when the world was still putting up its first website in 1991. Stuart Haber and W. Scott Stornetta both believed that a system that utilizes timestamps could be established in order to protect the data of the user. Their concept not only gained traction but as technology progressed it became a reality with its primary application in cryptocurrencies in 2008. Despite the increasing hype around all cryptocurrencies, few know the actual workings of them and their backbone: blockchain.
Now you may think I’ve become a lunatic for placing a random picture of two lego blocks in a blog but these lego blocks are going to help us understand how blockchain works. Apt to its name, Blockchain consists of a series(chain) of information blocks all connected using a hashing algorithm. This means that each block consists of 3 parts. The first part of the block is what helps connect the block to the previous block; this is only possible if the block and the previous block have something in common: the hash. The hash is a line of code that is generated based on the information in the block. For example, if I store my name in a block, the code would use my name to generate a Hash that would be used to connect my block to the next. This hashing algorithm can be seen as the top of the yellow lego block and the bottom of the red lego block. As the legos snap into place, the blocks on the blockchain snap into their chain.
The second part of our blockchain contains the information; this stores all the necessary information of the user. In the case of cryptocurrency transactions, this would store the following information: public key of sender and receiver, time of the transaction, amount of transaction, and a validation of the transaction. This enables the transaction to become secure and verified by several nodes within the system. For cryptocurrencies, instead of internalizing the work required to maintain this blockchain, most firms allow users to become nodes by solving problems to place blocks in the blockchain and earn some monetary benefits. The storage part of the system is within the lego pieces or blocks of the blockchain.
Lastly, there is the connecting hash. Now for one block to be connected to the next, as previously mentioned, there needs to be something in common. The data entered in the block would determine this hash and once determined, the hash would be replicated by the future block. The hash is drastically affected by the data within the block and if the data were to change by one symbol, the entire hash would change. Now if one hash changes, every hash in front of it would have to change, leading to detection of data invasion and hence making it extremely transparent. This second hash is represented by the top of a lego piece.
Apart from the infamous cryptocurrencies that utilize a blockchain network, there are several other applications of blockchain systems within the real world, especially when the data storage is an extreme concern.
As several voters grow concerned about voting scandals and frauds, a blockchain system would ensure that this data is securely stored and would also be transparent, allowing the voters to see the data that is being stored. This would allow the government to keep a track of the voter’s details as well as their choice of candidate. This would ensure that the voting process gets expedited and is stored in a safe manner. If any 3rd party chooses to falsify votes, the blockchain would be greatly impacted as the hashes would change leading to an immediate detection of intrusion.
As more and more firms have started maintaining their data upon cloud servers, smart contracts grow extremely appealing. A smart contract is an agreement between two parties wherein the details of the agreement are stored within a block. This enables the details to remain secure and can also contain the digital signatures of both parties to ensure that the block is legitimate. If one of the parties chooses to alter the contract, the other party would be informed of it through the changing hashes.
Music ownership and royalty distribution
For countless decades, the two problems that arise with the production and sales of music records are the ownership of the song and the royalty distribution. With the record studios downplaying the records sales in order to prevent royalty payments and the artists demanding ownership of the records, the only solution to ensure that both parties are able to transparently view their own rights is the creation of a decentralized database that would be updated at frequent intervals wherein both parties can view the data related to a particular record, including the sales and the distribution between labels. To further boost the efficacy of the blockchain, the artists can also be paid in cryptocurrencies as their royalty.
Overall, blockchain has had a significant impact on the economy today as it aims to decentralize the data storage of several sectors and also promote the transparency of data. In my opinion, blockchain is a key part of the digital economy and has significantly impacted the way firms look at the storage of their data. The blockchain network is one step towards a more digital world.