Blockchain is a technology introduced in 2008 and has already great impact in various domains of applications where edge technological advancements play a crucial role. A blockchain can be defined as a digital, chronologically updated, distributed and cryptographically sealed record, of all data transfer activity. It may be thought of as a cloud-based ledger that is shared among a network of users, the participants, recording all data being transferred between them. This record displays all the information related to the data while at the same time allowing the identity of the involved participants to remain confidential. The record can be viewed by all participants, but updates can only be made after being agreed upon by a majority of participants. Furthermore, once the data is entered into the record it can no longer be deleted.
This specific technology is consisted of four important pylons:
- Digital: Blockchain is completely digital, meaning that it can be mapped to any digital entity and this provides a huge potential for various implementations across industry and application domains.
- Historical Timeline: Blockchain creates a timeline of chronologically updated blocks securing the whole transaction system. it also creates a reference system from one block to another.
- Preserved with Cryptography: this is one of the most important aspects of blockchain. Once something has been created and written on the ledger it can no longer be changed by anyone, because for this it would require a huge effort to break the specific cryptography and then even if someone did succeed on this the block wouldn’t match what the overall ledger expects and thus would be invalid. More information on the technical details can be found at the work of Kosba, Miller,Shi, Wen and Papamanthou.
- Distributed by Nature: no-one owns blockchain, and by making transactions onto that, anyone is participating on the overall support. everything is public and open and if someone tries to gain the majority so that he can manipulate the ledger, can be discarded automatically by the community and agents that monitor the ledger health.
It is rather clear that everyone can participate, there is no identity disclosure and as already mentioned, manipulation is difficult due to its distributed nature.
Synopsising, blockchain enables the transfer of digital assets, representing various manifestations of value or possessing inherent value within themselves. It is a secure way to enable such transactions and various other digital activities. The most importance aspect of blockchain that has helped it gain such popularity is the the employment of self governance of transfer of ownership. It may complement existing regulative systems through digitization and cross-border capabilities. Those capabilities can be easily explored both in the popular Bitcoin as well as in the Ethereum framework which aims to extend blockchain in more applications than just the financial ones.
Even this innovative technology comes with its challenges. First of all, even though blockchains make the cost of transactions minimal, it is highly expensive for any serious stakeholder to adopt the cost of the servers needed. It is also expensive from an energy consumption perspective to run the overall blockchain because it needs to be validated by millions of participants every single time a transaction is been made. This means many times per second by millions of nodes. Albeit there are many different applications and areas of applications, blockchain requires a different mindset of implementation and thus a great shift on mentality and a huge investment by companies that want to blockchain in their core value. Blockchain also offers a cultural change where not everyone is ready to accept it.
There is already a huge ecosystem of startups, companies and even huge enterprises (e.g. IBM) around the world that implement and offer blockchain solutions. Most of those at the moment offer some solutions around the coin services that has been built on top of blockchain, for example Bitcoin and the many many Bitcoin services that offer wallets, validate transactions or just exchange those into other forms of currency. Others, have already discovered the various different use cases that this technology offers and try to innovate, like Philips, Samsung, IBM and more  There are also some interesting blockchain implementations like a nice project management and collaboration platform or another effort that uses this technology as the underlying source to fuel a online trading for actual goods and postages.
The future of blockchain is yet to be written, and with the rise of Smart Cities and the Internet of Things the possibilities seem countless. Those two domains offer a vast playground for innovation on the way transactions on traditional fields can be digitized and thus enable new business models as well as empower new digital transactions or new digital products. Since blockchain handles digital assets in an innovative secure collaborative way, it is perfect for vast distributed applications that have multiple stakeholders that need to enable synergies between one another.
Interested in API strategy, architecture, and design. Working to improve the quality and usability of information on the Web. CTO @OrfiumMusic