The things about great inventions are that we actually don’t know much the day they are invented but a couple of years down the line they would be evolved into something which is hard-wired in our world, electricity, machines, the internet is some of the examples. A few decades earlier internet was just a couple of computers or dozen of dots loosely coupled around the world but today we cannot imagine our life without the same.
Imagine a Blockchain as a vast global database spread out over millions of computers all over the world; it stores transactions of values (Money, Information or any Asset). Every invention has some purpose, a purpose to fill some Gap in the existing system, like printing press, filled the knowledge Gap, Engine had filled the Power Gap, Internet had filled up distance Gap & the blockchain fills-up the Gap of Trust, it changes the way we trust, not just the way we trust each other but more specifically the trust with entities like Private companies or Government Agencies. In order to transact with any Party, we must trust each other & blockchain provides the necessary tools & framework in order to establish trust with these transacting party.
Every Transaction in blockchain is stored in database called Ledger which is immutable, for example, while buying a property/house you would enquire in a government agency taking care of Property Titles but what if certain records like any property Violation is tampered & modified by fraud, thus you might end up paying a higher price for the house. The blockchain framework covers this Gap of Trust with its immutable & Cryptographic property of Trust with Verification. Every Blockchain record which goes into Ledger has a unique key (Let us keep aside the technical details of Cryptography & hash keys for the purpose of simplification) & every record is stamped by trusted party who wrote the record. Now during the writing of the next record, the previous key along with data of a current record is encrypted through a cryptographic formula, which is also written along with the current record. The Key in the Second record is dependent on first & the key in Third record is dependent on second & so on & thus essentially chaining all the records together & hence the word ‘chain’ in the “Blockchain” & in case if someone has modified a record in between then we can clearly identify and recognize the tampered record, the Ledger is immutable & you can mess with it but it is very easy to tell which records are tampered.
The below properties of Blockchain framework is used as a backbone for various Crypto Currencies like Bitcoin & Ethereum but such application is just a Tip of an Iceberg & there is much to it than we can even imagine.
Properties of Blockchain:
- The Blockchain ledger belongs to the public & is very transparent to everyone.
- It is immutable & permanent; we cannot get rid of any digital transaction from a blockchain ledger.
- It is highly reliable due to its Cryptographic property.
- It is decentralized which makes it tamper-proof or harder to hack.
Examples of Usage of Blockchain:
- Imagine you are allergic to a fruit other than organic fruit & based on a sticker on the fruit you trust the counter party that the fruit sold is from an organic farm. Now instead of a Sticker if the company provides a QR Code sticker & after scanning that with phone it opens up an app that shows all the transaction that happened on the farm including all the chemicals which were applied to it & it is running on the block chain so as we know that we can trust it.
- Imagine a Single System of blockchain framework with decentralized database & covering various Government agencies to store data like Property Titles, DMV, Government Benefits, Death Certificates, Marriage Certificates, Birth Certificates, Medical Records, etc & all agencies are storing data in one massive blockchain framework, the information which could be categorized into parts, public records which are accessible to all & private records which can only be accessible only through Cryptographic keys of the user. The blockchain system helps us to prevent tampering, frauds & thus prevent forgery from the very Book Keeping Government agencies due to its basic fundamental properties.