Initial google search on this term return this definition
a digital ledger in which transactions made in bitcoin or another crypto currency are recorded chronologically and publicly.
Now’s let’s try to break down this concept.
A ledger is a book that summarizes and classifies all the transactions (in most cases, financial ones) in a standardized format. All entries made in the ledger are permanent and hence businesses take utmost care to ensure only correct entries are made. Now put this definition in digital space, you get a digital ledger.
Digital currency fall in this category in which the currency units are similar to their physical (regular) currency but are completely digital in nature without any physical asset backing them. The supply of the currency is limited in nature and the process is known as ‘Mining’ in the case of bitcoins and hence the . Block-chain technology allows the transactions to happen instantaneously in a peer-to-peer fashion, allowing the system to be completely decentralized.
Now, the natural question is why would anyone prefer a crypto-currency like bitcoin which is not even issued by a government? One, The very fact that is not-regulated by any government or central authority makes it an attractive proposition when the regular currencies are heavily moderated by the authorities. Second, it allows the people who do not (or are not allowed in) regular banking system to do transactions digitally. Along with these, the feature of instantaneous and accurate/secured transactions, the demand for bitcoins are growing up in a steady fashion pushing up their value astronomically. Now, Blockchain being the backbone of this newfound currency is gaining much popularity and firms are finding new uses for the same.
Future applications for Blockchain
Digital, Decentralized, Fully-secure, Encrypted and Instantaneous sound music to businesses that do large volume transactions with multiple stakeholders. Time is money to them and they want it to get these transactions processed without giving up on security.
Following are some business cases where Blockchain is expected to make a big impact:
- Smart Contracts which in simple terms would execute pre-programmed transactions if certain pre-conditions are met. This would allow businesses to be extremely efficient, quick and secure.
- Internet-of-Things a.k.a IOT with Blockchain would bring the concept to a wider audience because the technology allows the sensors to connect over internet in a fast and secure way.This could impact supply-chain area of the businesses.
- Blockchain for Identities would allow people to carry their private,sensitive identity documents online without fearing any breach of security or privacy. This is because unlike traditional password encrypted form of security, blockchain works in a private-public key form of cryptography where the check is whether the correct private key was used to access the information,i.e. the owner of the private key is considered to be rightful owner of the information.
Now this article is just a primer to what seems to be a very exciting technology in making. Hopefully this will push the frontier to a much higher level.