December 1, 2020 Technology
By Millie Hall
Blockchain is a database which consists of, yes you guessed it, blocks. Each block is a record of data, anything from medical to financial. After a block is used to store digital information, another is added to the chain. These blocks are stored chronologically. These blocks continuously grow, old blocks are stored indefinitely and new ones are continuously added.
How does it work?
This data is not stored in one central location but is instead stored by multiple parties around the world. All blocks are stored publicly, even if they are anonymous. This means that there are multiple copies of the same blockchain, no single person or agency controls the database. The database is decentralised.
After a block is added it is near impossible to go back and alter the contents of what is stored in the block. Each block generates its own name, called a hash, which comprises numbers and letters. This hash is unique to each block and links to the previous block. If one were to edit the content of a block, the hash would change. The next block in the chain would still contain the old hash, and the next one, and so on. This means that in order to change a single block one would have to change every single block after it on the blockchain. It would thus be impossible to alter the record of a block once the blockchain has been updated. It is this high-level security which has made blockchain a popular technology.
Benefits of Blockchain:
Each transaction is linked to the previous one and is in turn encrypted to provide a unique hash. This identification code is unique, and cannot be successfully altered. Adding to its high level of security and transparency, information is not stored on one single computer but is decentralised.
Blockchain is open-source software. This means that the data record is open to public viewing allowing for transparency and equal access to stored data. Each time a transaction is recorded a data trail is created to provide traceability. Any individual can access this record.
Blockchain provides a network which provides anonymity, an Individuals’ identity remains confidential.
Blockchain has removed the need for a middle man in the processes of payments, consequently, it facilitates faster data transactions.
How is blockchain used?
One of the most popular applications of blockchain involves payment processing and the transfer of funds. The need for banks is removed. Therefore, without the middleman, transactions can be safe, secure and immediate.
Given the transparent nature of blockchain, companies can utilise the database to record their sales and compliance with local laws. Blockchain facilitates a complete record of transactions and taxes paid.
Created to increase frequent flyer efficiency, Accenture has collaborated with the World Economic Forum to create a digital identity. Frequent flyers are able to store identification documents in order to reduce queuing times at airports.
As Blockchain has a tamper-proof nature it is the perfect host for identification documents. Upload your passport, drivers license, or even your property references in order to efficiently store and access sensitive information.
What makes blockchain different?
The most notable difference between blockchain and a database is centralisation. All records on a database are centralised. This means that they are located and maintained in a single location. However, each user has a copy of all records. Databases, on the other hand, are administered by a select person or group of people. Since blockchain is public, it offers data transparency, but If the security of the database is compromised, records can be altered or deleted.