Blockchain technology is undoubtedly a brilliant invention, as the technology of the block system built the basis for a new era on the Internet by allowing digital information to be distributed not being copied. Despite the technology was created for Bitcoin, technicians are looking for other potential implementations for blockchain technology in other spheres, as it could be a game-changing invention for the development of the modern society.
Blockchain technology was created with the advent of Bitcoin cryptocurrency in 2009 by Satoshi Nakamoto, a person who is mythologized in the world of cryptocurrencies (Swan, 2015). This is a pseudonym, behind which stands one or several people who decided not to disclose their identities. The blockchain is an eternal digital log of economic transactions which can record not only financial transactions but everything that has value (Tapscott & Tapscott, 2017). The idea of blockchain is that the information is stored in blocks, which is an advantage as the database blocks are not stored in any single place. This means that it keeps records publicly and they can be easily checked. There is no centralized version of this information that could be damaged by the hacker. Copies are stored on millions of computers at a time, and its data is available to everyone on the Internet (Treleaven, Brown, & Yang, 2017). There are two types of chain. The first is public blockchain, which is an open, complemented database, where each participant can record and read data. This type of block is used in the Bitcoin cryptocurrency. Another one is the private blockchain which has limits on reading and writing data because priority nodes can be set (Swan, 2015).
The blockchain system works as a sequence of blocks that are shared among people using peer-to-peer networks (Treleaven, Brown, & Yang, 2017). Transactions are transferred to the network and collected in a block; each block has the number and hash of the previous block. Then blocks are sent to all participants of the system for verification; if there are no mistakes, every participant writes a block to his own database. After that, the block could be added to the blockchain that has the information about all previous transactions (Treleaven, Brown, & Yang, 2017). Using these steps, money could be transferred from one person to another. If someone tries to reconstruct the sequence, the system will dismiss the chain because of the discrepancy between the hash sum and the structure. The blockchain system uses several methods of protection such as PoS (proof of possession) and PoW (proof of work), so that no one can change the timestamp and recalculate the hash amount (Nakamoto, 2011).
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Key features of blockchain are transparency, as the information about transactions and contracts are kept publicly available. At the same time, this data can not be changed. Theoretical unlimitedness means that the block can be supplemented with entries to infinity. Reliability to conserve new data requires a consensus of the nodes of the block (Nakatomo, 2011). It gives an opportunity to track operations and record only legitimate transactions. Implementing a hash substitution is unrealistic.
Blockchain technology gives organizations an opportunity to improve their financial operations by using some of its useful features. Sensitive information could be stored in the way that it cannot be deleted or modified by the employee. Smart contracts will be able to automate every process in financial activity of the organization that doesn’t need creativity (Treleaven, Brown, & Yang, 2017). Furthermore, organizations that accept cryptocurrencies will be able to pay salaries in it or transfer value to others (Scott, Loonam, & Kumar, 2017). Blockchain will also allow organizations that need special talents to receive better information about potential employees, since it will have access to the information cache, which is known to be correct, as it was stored and managed in a highly secure distributed database (Fleming, 2017).
There are some privacy issues in the blockchain technology, as transactions are safe as long as they are not directly tied to a person’s identity. Since then, it becomes possible to track someone’s identity using the transactional address (Al-Saqaf & Seidler, 2017). The other problem is that blockchain limits the number of transaction to only 7 per second, which is slowing down the process (Fleming, 2017). Another drawback of blockchain is its high energy dependence, which makes it an expensive technology (Fleming, 2017). The differentiation of the blockage also causes concern. Currently, the number of digital coins is growing, and many of them are using the blockchain technology. But it is not yet clear which of them will be able to survive and develop in the future, which of them will be preferred by developers and large companies, and which will go into oblivion (Fleming, 2017).
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Due to its versatility and the ability to encrypt data, the technology of blockchain has the potential to be used in a large number of spheres. Knowingly, IBM calls on the US government to start using it in government processes and thereby save not only money but also time (Mearian, 2018). Taking into account that the main advantage of the blockchain over the traditional banking transactions is the absence of intermediaries, it could be used in the finance system. As for now, all transactions with money, documents or other data inevitably pass through intermediaries because banks and government agencies constantly confirm the authenticity of the operations performed (Treleaven, Brown, & Yang, 2017). The blockchain does not have a central authority, therefore transactions are checked by all participants of the system. This allows to simplify the procedure and get rid of intermediaries (Tapscott & Tapscott, 2017). The program code of the network is open, and anyone can refer to it, but the identity and other personal information remain private.
Blockchain opportunities could also be used in politics, especially in elections. Embedding the technology into the elections will allow everyone honestly vote for their candidate; since it is impossible to change the blockchain, it won’t be possible to falsify it (Foroglou & Tsilidou, 2015). Introducing the blockchain into healthcare will make it possible to write down the whole medical history, the information about vaccinations, and it will not be lost anywhere. Furthermore, all doctor mistakes will also be recorded in the blockchain, which will be a motivator for good work (Angraal, Krumholz, & Schulz, 2017). In logistics, blockchain could help to get rid of a large number of intermediaries. Taking any product from production will help people to know where it was produced and how long it was in the warehouse (Hackius & Petersen, 2017).
Taking into account all the information above, it is safe to say that blockchain technology could become one of the most influential inventions of the modern society. It not only introduces cryptocurrencies to the world but also gives organizations and governments an opportunity to improve some valuable spheres of their activity. The technology certainly has some limitations, but it could be fixed over time as blockchain has the potential to become the main factor of the nearest future progress.