What Is Blockchain Technology?
A blockchain is an immutable database for recording digital information. The information stored is distributed in real time across multiple computers, also referred to as nodes.
How can blockchain technology be used?
Blockchain technology can be used to store any kind of information that needs to be kept unaltered, readily available and secure.
More specifically, it allows you to verify, track and store anything from digital certificates to voting systems, logistics services and transport, smart contracts as well as financial transactions.
What does a blockchain consist of?
A blockchain is made up of a linear chain of blocks, each containing verified transactions in the order in which they occurred.
Imagine a Lego block building, where each block is a transaction and every new block added contains all the information of the previous blocks, which cannot be modified or deleted.
How is a blockchain immutable?
Each block contains its own unique code called a hash, along with the hash of the block before it. If the information is edited in any way, the hash code changes as well.
This is why once a block is added to the blockchain, it becomes very difficult to edit and impossible to delete. It also leaves very little room for fraud, as everything is transparent and auditable by anyone, real time.
One could say that blockchain replaces trust with mathematical truth.
What are smart contracts?
Instead of signing a paper contract and engaging a third-party mediator to ensure that a contract is fulfilled, a smart contract automatically executes itself when the conditions signed by the two parties are fulfilled.
For example, imagine that you buy a plane ticket and add an insurance policy that would provide you with a full refund if the flight is delayed for more than four hours.
You are sitting in the terminal, waiting for your flight to depart. Four hours later, you are yet to board the flight. Consequently, you get a notification on your phone about a deposit made to your account.
The payment into your account was triggered by the insurance policy condition being met in your smart contract.
In this scenario, the implementation of a smart contract would eliminate the need for lengthy and cumbersome paperwork, resulting in savings for both the company and the client.
