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Blockchain 101: Just What is this New Technology?

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In plain English, blockchain is a database. Here, backups of new data will occur on potentially thousands of computers all over the world.

Heavy encryption helps to keep this information secure.  Even if hackers compromise information on a single server, there are thousands of other copies around the globe. What’s interesting is that all copies of the database must agree with all other servers if any changes to the data are legitimate.  If even one server cannot confirm the legitimacy of the modifications, rejection of these changes occurs immediately.

That may oversimplify it, but you see the benefits this new technology offers

According to the Evening Standard:

“Any data put into the blockchain must be verified. Transactions are grouped together in blocks, hence the name blockchain, then verified by the computers (nodes) in the network. When a computer joins the network as a node, they receive a copy of the blockchain, which acts as proof of all the transactions that have been performed. This means that all data stored on the network is transparent; it is public by default. This also means that all the data in the blockchain network cannot be corrupted or deleted. However, this doesn’t mean you can see who is doing the transaction. For instance, with Bitcoin, the public can see that someone is sending an amount to someone else but there is no information linking the transaction to anyone.”

What this new technology allows you to do is produce a dependable ledger without record-keepers.  It also eliminates the dangers that come with keeping data in a central location.  Not only does it foster trust, it replaces third-party intermediaries when all blockchain participants must certify the transactions taking place.

Plus, according to Fortune, “The blockchain enables companies doing business with each other to record transactions securely. Its strength lies in its trustworthiness: It is difficult to reverse or change what’s been recorded. The blockchain can also hold many more documents and data than traditional database storage, allowing for more nuanced insights and analysis.”

Blockchain is Changing the World — and Fast

Countless industries can become more efficient and effective when they implement this new technology. This is why the demand for new blockchain engineers is skyrocketing. Everyone wants to get a piece of the action, most notably the banking sector.

The technology allows for quicker transactions, lower costs and enhanced transparency. No longer will you have to wait countless working days for a new transfer to process or suffer through exorbitant charges for sending money across borders.

One of the entities doing well in this space is Ripple. They are forging new partnerships with many notable financial institutions worldwide. Of course, the banking sector can be slow to change, but significant changes are imminent in the next few years.

In an effort to encourage further blockchain adoption, Banco Santander launched a mobile payment solution powered by RippleNet.

For one, Banco Santander is the world’s ninth largest financial institution by revenue.  Two, it’s the biggest bank in the Eurozone.  And three, by launching its own blockchain solution, this catalyst could very well spearhead the adoption of blockchain in the financial sector.

 

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