Blockchain Technology

Blockchain technology such as Bitcoin have gained much attention both in the news and in politics over the last few years. Yet what is blockchain technology and what makes it such a widely covered subject. Blockchain technology is in its most basic form a history of transactions that are taken from a network of computers. First a transaction occurs then is documented and verified by a computer using a mathematical equation. Then the network is able to add this new transaction to the end of the blockchain. This history is public meaning it can be viewed on any computer and is resistant to any data modification.

The reason blockchain technology has become popular is through its implementation within the cryptocurrency Bitcoin. Bitcoin was first proposed by an anonymous author(s) by the name of Satoshi Nakamoto who wanted to create a currency that didn’t rely on an institution like a bank. But the decentralization of the currency presented a major issue because there would be no entity to prevent counterfeits or falsified transactions. This is where blockchains come into play. Dedicated computers were put into place so that the blockchain could be maintained and transactions could be recorded. The only reliance Bitcoin had was on mathematical equations and computational power. But who would provide the computational power for the blockchain? Nakamoto introduced the idea that people who offered the computational power would be given bitcoin as an incentive therefore keep the blockchain active while also putting more bitcoin into circulation. This process is now commonly referred to as mining.

Another problem mentioned before was how would transactions be verified. Yet the beauty of blockchain technology is that every transaction that occurs is in some part related to previous records. This means that if someone wanted to alter the blockchain they would have to both modify previous and current records so that it would replace the existing transactions. However this is extremely unlikely because the amount computational power required is 51% of the entire system’s processing power.

Although currently bitcoin seems like the main implementation of blockchain technology, in the future any transaction based system could utilize this technology for secure transactions.

-Allen Shen

Sources:

https://computer.howstuffworks.com/blockchain-technology-ready-to-disrupt-world.htm

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