Technology is constantly evolving, and blockchain represents the next step of evolution for many systems.
Imagine Mastercard’s payment processing network. All over the world Mastercard maintains a payment network that provides plastic cards tied to a line of credit. These plastic cards can be used with any payment terminal that is integrated with the Mastercard network.
When you swipe, tap, or enter online your card at the payment terminal, Mastercard reads your plastic card number and looks up your account. Next, Mastercard checks to see that you have the credit available, and if you do they transfer the funds from your line of credit to the merchant.
Built-in to this process is dispute resolution, fraud prevention, and credit checks. This is all done to keep bad actors out of the Mastercard network – keeping a safe environment for members of the payment network.
To keep all of this up and running smoothly, Mastercard has to maintain massive computers and databases.
What does this have to do with Blockchain?
A blockchain is very similar to this type of network – blockchains have all of the same features, with one notable exception. Mastercard is centralized, this means everything is under the control of Mastercard. At any time, Mastercard can deny someone from their network, or deny them the ability to send funds to someone.
Blockchains are open, transparent, and permissionless. Anyone who has cryptocurrency can send it to anyone else. The network is decentralized, this means no one entity has control over the network.
Imagine the Mastercard example, except instead of Mastercard running the show, the network is run by thousands of participants all over the globe. Any changes made to Mastercard have to be approved by the community at large.
At its core, Blockchain is a database that monitors and updates itself in real time, with the ability to verify data integrity and keep it in sync across unlimited devices spread out across the globe.
Why is it revolutionary?
The internet was released to the public in 1993. As each year passed, the internet grew exponentially. At first, the changes were only noticeable to those who were involved. Then came the early adopters, and as companies moved in we had the dot-com boom. Where the internet is now, in 2020, is the result of almost 30 years of constant improvement.
When we look at Bitcoin, it was first released in 2009. Litecoin came along in 2011, and it wasn’t until 2015 that Ethereum was created. Bitcoin was the first to establish a proof-of-concept for blockchains and provide a real working example of how it worked. Developers improved the technology, and in 5 years time work was being done on creating Ethereum – a blockchain infrastructure platform that aims to be the world’s supercomputer. A supercomputer that is open and accessible to everyone.
Today, thousands of blockchains exist and are in use. Solutions are being built for every industry and every use case. There are public blockchains, and private blockchains. Private blockchains are ones where the use is private, for example being used only by a company for their work.
The benefits blockchain brings include increased transparency, increased cooperation, data integrity, reduced fraud, and more. The world has moved to digital at a faster pace than any time in history, and Blockchain is a technology that keeps the digital world fair, transparent, and secure.