Blockchain is the technology on which Bitcoin
is based. The Blockchain is, as it were, a ledger with balance sheets and transactions that are verified by a decentralized party. This decentralized party consists of all participants who make use of the network. As a result, not one body or individual is the owner of the network, but nobody is the owner. The network, based on the peer-to-peer protocol (P2PP), distributes the ownership evenly across all participants. For this reason it is a network where everyone who wants to can participate.
To better understand Blockchain, you could compare it to a spreadsheet, with lines of data that can be modified at will. A good example is Google Spreadsheets, where users can make changes that the other users can see as they are being made. Blockchain, on the other hand, is different. Lines cannot be changed, they can only be added. The added lines are then checked for authenticity by all other members of the network, who all have an exact copy of the Blockchain. Changes to old lines are only possible if a majority of the network agrees. That is called a ‘Hard Fork’.
The technology can be used for multiple applications, the most famous of which to data is Bitcoin, the digital currency. Bitcoin can only be used for transactions. The basic rule for the blockchain of Bitcoin is that a new line has to be connected with an existing line, making it impossible to create Bitcoin from nothing. Bitcoin can be earned by verifying transactions of the network, which requires an immense amount of computing power and is popularly known as ‘mining’.
Blockchain could also be used in (national) elections, which currently use physical voting tickets, which can be lost or altered. Blockchain can make the process more reliable – and cheaper, because each new vote is added as a line and verified by the network. Votes cannot be altered afterwards and there is no need to spend money on paper voting tickets.
At the moment, multiple organizations are already using Blockchain. For instance, in October 2018, two financial institutions in Australia conduct a mutual transaction using Blockchain. They traded $ 35,000 worth of cotton from the US. As soon as the shipment reached its destination in China and it was scanned and entered into the system, and verified by the network, the money was transferred to the other party immediately and ownership of the goods transferred to the buyer.
DJ Hardwell and his company are also using the technology. He uses blockchain technology to manage the payments of his music. That guarantees a quick payment of royalties, with few mistakes. In addition to managing payments, the DJ also uses smart contract to record his agreements.