BLOCHCHAIN TODAY AND IN FUTURE

Blockchains are incredibly popular nowadays.

But what is a blockchain?

How do they work, what problems do they solve and how can they be used?

Like the name indicates, a blockchain is a chain of blocks that contains information.

This technique was originally described in by a group of researchers and was originally intended
to timestamp digital documents so that it’s not possible to backdate them or tamper with them.

Almost like a notary.

However, it went mostly unused until it was adapted by Satoshi Nakamoto to create the digital
cryptocurrency Bitcoin.

A block chain is a distributed ledger that is completely open to anyone.

They have an interesting property once some data has been recorded inside a block chain, it
becomes very difficult to change it.

So how does that work?

Well, let’s take a closer look at a block. Each block contains some data, the hash of the block and
the hash of the previous block. The data that is stored inside a block depends on the type of block
chain. The Bitcoin block chain for example stores the details about a transaction here, such as the
sender, receiver, and amount of coins. A block also has a hash. You can compare a hash to a
fingerprint. It identifies a block and all of its contents and it's always unique, just like a
fingerprint. Once a block is created, its hash is being calculated. Changing something inside the
block will cause the hash to change. So in other words hashes are very useful when you want to
detect changes to blocks. If the fingerprint of a block changes, it no longer is the same block.
The third element inside each block is the hash of the previous block.

This effectively creates a chain of blocks and it’s this technique that makes a block chain so
secure. Let's take an example. Here we have a chain of blocks. As you can see, each block has a
hash and the hash of the previous block. So block number points to block number and number
points to number.

We call this the genesis block. Now let's say that you tamper with the second block. This causes
the hash of the block to change as well. In turn that will make block and all following blocks
invalid because they no longer store a valid hash of the previous block.

So changing a single block will make all following blocks invalid. But using hashes is not
enough to prevent tampering. Computers these days are very fast and can calculate hundreds of
thousands of hashes per second. You could effectively tamper with a block and recalculate all the
hashes of other blocks to make your blockchain valid again. So to mitigate this, blockchains have
something called proof-of-work. It's a mechanism that slows down the creation of new blocks. In
Bitcoins case it takes about minutes to calculate the required proof-of-work and add a new
block to the chain. This mechanism makes it very hard to tamper with the blocks, because if you
tamper with block, you'll need to recalculate the proof-of-work for all the following blocks.

So the security of a blockchain comes from its creative use of hashing and the proof-of-work
mechanism. But there is one more way that blockchains secure themselves and that's by being
distributed. Instead of using a central entity to manage the chain, blockchains use a peer-to-peer
network and anyone is allowed to join. When someone joins this network, he gets the full copy
of the blockchain. The node can use this to verify that everything is still in order. Now let's see
what happens when someone creates a new block. That new block is send to everyone on the
network. Each node then verifies the block to make sure that it hasn't been tampered with. If
everything checks out, each node adds this block to their own blockchain. All the nodes in this
network create consensus. They agree about what blocks are valid and which aren't. Blocks that
are tampered with will be rejected by other nodes in the network. So to successfully tamper with
a blockchain you'll need to tamper with all blocks on the chain, redo the proof-of-work for each
block and take control of more than % of the peer-to-peer network. Only then will your tampered
block become accepted by everyone else.

This is almost impossible to do!

Blockchains are also constantly evolving. One of the more recent developments is the creation of
smart contracts.These contracts are simple programs that are stored on the blockchain and can be
used to automatically exchange coins based on certain conditions. More on smart contracts in a
later video.

The creation of blockchain technology peaked a lot of people’s interest. Soon, others realized
that the technology could be used for other things like storing medical records, creating a digital
notary or even collecting taxes.

So now you know what a blockchain is, how it works on basic level and what problems it solves.
Want to learn how you can implement a simple blockchain with Javascript?

FUTURE OF BLOCKCHAIN
I’m going to explain blockchain use cases by industry that will transform your everyday life.

Even though blockchain technology came to existence with Bitcoin, blockchain has a far-
reaching potential outside of cryptocurrency. Basically, blockchain is a shared database that
allows multiple parties to access data and verify that data in real time. It can transform the way
we do things in numerous industries, including the following

Government Blockchain can benefit governments around the world in three ways
Digital Voting Blockchain technology can help us ensure that the voting processes for elections
can happen securely with transparently. Each vote would be attributed to one ID, and with the
ability to create a fake ID being near impossible, government officials could count votes
immediately as they are submitted.

That means, you can find out who won an important election in as soon as an hour or two after
polls close instead of a few days in some cases.

Follow My Vote is a great example of a start-up that uses blockchain technology to enable a
transparent online voting platform. But no matter how secure and transparent an election is, some
people are bound to be unsatisfied with the process.

Transparent Budgeting According to the Corruption Perceptions Index provided by

transparency.org, two-thirds of countries are considered highly corrupt. Blockchain technology
can make budgeting decisions highly transparent in a government to reduce corruption and
Waste Record Management National, state, and local governments are responsible for
maintaining individuals' records such as birth and death dates, marital statuses, property
transfers, and passports. Blockchain technology could dramatically simplify this Record keeping
and make the data far more secure. Healthcare A major problem in the healthcare industry is that
medical practitioners such as doctors and nurses lack a clear and complete understanding of each
patient’s medical history. That’s because medical records are placed in company databases that
are separated from each other. This hinders their ability to provide effective healthcare solutions.

We can share medical records on a blockchain that would allow multiple healthcare companies
to access that data in real time. Those medical records can include prescriptions, past doctor
visits, past surgeries, medical conditions, and so on. Not only that, but this data would be
secured.

In theory, none of this stored information would be able to specifically identify any particular
patient. A patient would need to grant permission to a medical practitioner to have their full
medical history or part of that medical history temporarily viewable for a specific reason.

Media and Entertainment There are three major applications I’ll cover. General Media Media
companies are already using blockchain technology to eliminate fraud, reduce costs, and protect
their Intellectual property. According to MarketWatch, the global market for blockchain in media
and entertainment is estimated to reach $ 1000 billion by fan-to-artist direct payments If music
streaming companies like Spotify connect their apps to blockchains, they can ensure that when
songs are streamed, artists are compensated immediately and transparently.

Ticketing Show organizers often have the problem of not having access to their customers’
data. Blockchains can provide complete visibility of ticket information to all involved parties,
which would result in more customized and relevant experiences for customers.

Real Estate The average homeowner sells his or her home every five to seven years, and the
average person will move nearly times during their lifetime. Blockchain would expedite home
sales by quickly verifying finances, reducing paperwork, reducing fraud thanks to its encryption,
and offering transparency throughout the entire selling and purchasing process.
Supply Chain Management Blockchain technology can provide real-time tracking of products
as they move through each stage and location of a supply chain. It also enables multiple parties
including retailers, suppliers, and customers to access this data as needed from one decentralized
database that isn’t controlled by only one company.

Finance Here are a couple of blockchain applications under Finance.

When it comes to investment and trade, the blockchain can aid with

a. Increasing transparent governance

b. Increasing the speed of transfers
c. Lowering capital requirements
d. And reduced the risk of fraud and human error and when it comes to international transfers,
the blockchain can decrease the cost of those transfers by reducing the need for banks to
manually settle transactions.

For example, a financial services company called Banco Santander uses blockchain technology

to reduce the number of banks in its pipelines so that organizations or individuals can transfer
money across borders faster, more securely, and more efficiently.

Energy According to PWC, Blockchain technology could be used to execute energy supply
transactions, and enable metering, billing, and clearing processes. Other potential applications
include documenting ownership, asset management, origin verifications, emission allowances,
and renewable energy certificates.