By Yash Deshmukh and Anish Anburaja
With 2018’s sudden spike in the value of Bitcoin, many investors and entrepreneurs saw their profits go through the roof. Masses of average people hurried to follow this trend, in hopes of themselves hitting the jackpot. However, this process created a large misconception about Bitcoin to the general public. Many considered Bitcoin to be a stock, and some even viewed it as a simple “money making tool”. However, Bitcoin, which first debuted in 2009, is the forefront example of a cryptocurrency. To understand cryptos, we must first be able to comprehend their foundation: blockchain.
In simplest terms, a blockchain is literally a chain of blocks, but not it the literal sense. In the blockchain, each ‘block’ is data, which can be broken down into 3 parts: a transaction, who made that transaction, and a unique identifier for each individual block. A blockchain is formed when multiple blocks are put together, making creating a set of multiple transactions compiled together in one chain. But first, in order for a block to be created, there are some conditions that must be met. First, a verified transaction must take place, then that information has to be stored in a block, and finally, each block is given a sort on ID known as a hash. Then, the block joins hundreds of other blocks, where it can be viewed by anyone, creating a transparent network, where any and all transactions can be assumed as legitimate and public. In doing so, the blockchain becomes almost unhackable, as each new blockchain is stored in chronological order, and any attempt to alter the contents of an individual block is stopped by the hash. The hash is not only an ID, but it is also created based on the contents of its respective block, so changing the contents of the block would mean to change the hash of the block, which is nearly impossible because each hash is unique.
Changes made in the blockchain need to be proved. The average confirmation time is about 10 minutes. This is the cause of the reputable security that blockchain holds. A change to the chain is detectable, and difficult to make. As we know, blocks are linked to the previous block, which is linked to the previous block, and so forth. A change in information would need to be confirmed through every block, on every instance of the chain. This makes unexpected changes to the chain close to impossible, making the blockchain and currencies built upon it insanely secure.
Blockchain was invented much earlier but was only practically adopted in 2009, when an unknown entity with the alias Satoshi Nakamoto, who used it to build his cryptocurrency, Bitcoin. Since then, the secure nature of the blockchain has lured many banks, companies, and cryptocurrencies to store their transactional data, and the number of institutions who adopt this system will only go up from here. One example of this is how the healthcare industry, whose main priority using technology is to safely store patients’ records, have found a haven in blockchain technology. Due to the impenetrable nation of individual blocks, hospitals like Massachusetts General Hospital, one of the largest and advanced hospitals in the nation, are working to develop a blockchain system specifically for the healthcare industry. Another big concern, especially for Americans, is our fear of foreign intervention in our political process.
In 2018 during the Midterm Elections, the state of West Virginia used blockchain technology in their voting process, simultaneously making it more secure, and thus reducing the number of people needed to run the elections, which makes it cheaper. Because the blockchain automatically verifies the authenticity of the block through millions of servers, it removes the need for human verification, cutting costs and allowing the business/organization who uses it to operate more efficiently with the guarantee that their transactions are protected and authentic.
All in all, the blockchain system reduces the complexity of businesses, with almost no downside. Soon, blockchain technology could allow us to verify almost everything, from that organic label on your groceries, all the way to removing all voter fraud for every nation. The possibilities are endless. The future is yet to come, but we can guarantee that blockchain will be soon playing a major role in everyone’s lives.