How do we make sure that the money from donations is spent the right way? How do we trust someone we have never met before? When we buy fruit labelled organic, how do we trace its origin and make sure it is really organic?
To find answers to the aforementioned questions we need a system where records could be stored, facts could be verified by anyone, no alternations could be made and therefore security would be guaranteed. As a result, no one could cheat or hack the system by editing records because everyone taking part in this environment would be able to see if any changes were requested.
Systems like this already exist and the underlying technology that powers them is called blockchain. Blockchain stores information across the network of personal computers which makes information decentralised and distributed. Therefore, no central company or authority owns the system. However, everyone can use the system and help run it. In this way, it is impossible to take down the system or corrupt it. People who run the system use their computer to hold bundles of records submitted by others known as “blocks” in a chronological chain. The blockchain uses state-of-the-art cryptography to ensure that records can’t be altered by anyone else.
The most popular blockchain is called Bitcoin, which is a digital currency that you can send to anyone. You do not need to know the person and you do not need an intermediary such as a bank which makes Bitcoin different from credit cards, PayPal or other ways to send money. Bitcoin allows people from all over the world to transact money across borders avoiding high transaction fees imposed by banks. However, Bitcoin is just one application of the blockchains.
In the future, blockchains that manage and verify online data could enable us to:
– verify and protect our online identities
– verify the origin of a property, device or food to make sure we pay the right value for the item
– make self-driving cars safer
– make real-estate transactions cheaper, faster and efficient
– make medical records up to date and available to relevant stakeholders
This technology has the potential to change our lives, revolutionise services and make economy more equal, which would mean a happier society.
Image Credits: David stankiewicz (Wikimedia Commons), Madebyoliver and Freepik (Flaticons)
To learn more about blockchain applications across different industries, visit Coinify Newsroom.