The technology that makes up the foundation of new currencies such as Bitcoin is capable of much more…
An article review.
If you’ve been following technology related news at all over the past few years you’ve probably read headlines about Bitcoin and other cryptocurrencies, but if you’re like many people you may not know just how they work–and that’s understandable because how they work is based on an entirely new concept called blockchain.
While the concept is new and very different from how traditional currencies operate, a new video shared with us by Wes Pollard of Home Bank helps explain just what it is, and why it’s poised to change much more than buying and selling things online.
The video, posted on YouTube channel ColdFusion, explains that blockchain is a system based on the concept of distributed trust: it is a record of all transactions, secured by cryptology and distributed among many different people, or nodes. This prevents bad data from being able to spread, as it must be confirmed by multiple parts of the network before being accepted, keeping one entity from manipulating the data for their own gain. This technology also prevents one central authority or organization from being able to control and potentially manipulate the blockchain: there is no Central Bank of Bitcoin.
While Bitcoin itself remains on the fringes of currency (the value of one bitcoin can vary quite a bit from day to day) the video goes on to explain many powerful organizations are realizing the value of blockchain as a technology: the government of Sweden, the Nasdaq exchange, the Bank of England, Citi and Barclays are among those utilizing or planning to utilize it for tasks as varied as land registries, tracking diamonds and recording trading in private companies.
Regardless of where the price of Bitcoin goes in the coming months–China has already made moves to limit the currency’s use, for example–the blockchain is almost certainly here to stay, and will probably be working behind the scenes in a service you use.
Original video by ColdFusion posted on YouTube.