Blockchain technology has been around since 2008, and it has received plenty of attention recently thanks to the rise of cryptocurrency and its popularity with mainstream businesses like Overstock, Subway, and Microsoft. Despite the interest that cryptocurrencies have garnered in recent years, blockchain technology is being used by businesses in many other ways as well.
As you probably know, blockchain technology can be used in different areas of business, from finances to contracts. In this article, we’ll talk about its importance and why it can make your company even more efficient and effective. We’ll explain how it works and look at some good examples that already use blockchain technology in their businesses every day to streamline their operations and save time and money.
What Is Blockchain?
First off, let’s get a working definition of blockchain technology. A blockchain is a decentralized database or digital ledger that records transactions across many computers in such a way that makes it tamper-proof and nearly impossible to forge transactions. So while a traditional database managed by one organization can be controlled by one person, blockchain databases are managed by multiple people across an entire network—making it very difficult to do something shady like change your transaction after you’ve made it.
How Does The Blockchain Work?
The blockchain stores a history of all of a cryptocurrency’s transactions, or digital ledger entries. Cryptocurrencies, such as Bitcoin, Ethereum and Litecoin, are based on a technology called blockchain—the underlying mechanism by which these records are stored and updated. Essentially, blockchain is a shared public record of digital events that everyone can see. It’s an electronic ledger that maintains itself through distributed consensus.
What Are Its Applications?
The most well-known application of blockchain technology currently is cryptocurrency. Bitcoin, Ethereum, and Litecoin are all examples of cryptocurrencies that run on blockchains. But blockchains can do so much more than facilitate digital currencies. They can be used to store any information in a secure way—the same way they’re used to store currency transactions—and they can also be used to create decentralized networks or marketplaces (such as AirBnB). In other words, blockchains have potential applications in nearly every industry!
The Benefits of Using the Blockchain
The primary benefit of blockchain technology stems from its decentralized nature. It has no single point of failure and no way to shut it down; it’s a distributed ledger system. Also, every user in a blockchain has an identical copy of that ledger, which simplifies auditing, record-keeping and cost maintenance. It also facilitates transparent bookkeeping, with all parties having equal access to all transactions made on a given platform.
The Bottom Line
Blockchain technology has been hailed as one of the most revolutionary technological innovations since the creation of the internet and smartphones. The concept behind blockchain technology, which refers to the network of computers that maintains records of all digital transactions, has existed long before its integration into cryptocurrencies like Bitcoin, Ethereum, and Litecoin. However, because of their exponential growth over the past decade (Bitcoin’s market cap topped $160 billion at its peak in 2017), blockchains have earned increased attention from businesses, investors, and consumers alike.
