The subject of blockchain and the technology behind it is still a hot topic. In the course of an evening, 9 out of 10 parties refer to blockchain at least once — in a non-scientific study conducted by this author.
The word “blockchain” is going more mainstream but the fundamental understanding still remains confusing for many. Flex your know-it-all might at the next cocktail party by providing blockchain nuggets for folks to noodle on. Let’s try a little exercise: Figure out which two of the following statements are truths, and which one is a lie to help you discover more about blockchain.
Blockchain is like Vegas
We all have heard of the tag line, “What happens in Vegas, stays in Vegas.” For blockchain, each transaction that is uploaded to the blockchain, also stays on the blockchain. Just as you may selectively share information with your family and friends about your Vegas trip, you can also selectively share your blockchain data.
Data that goes into the blockchain are permanent. Once written, you cannot change the data. Each time a new transaction is written into the blockchain, it gets linked to the last transaction.
Unlike most cryptocurrencies, blockchains built for business allow information to be selectively shared. You may, for example share all of your Vegas stories with your best friend and just tell a couple stories to a work colleague. You upload, you own, and you control your data.
Blockchain is like writing with a pen
Given the immutable nature of data on the blockchain, you may be wondering what happens if a mistake is made. How do you correct erroneous data? Simple — you just append the data. Blockchain then allows you to see what changed and not just the change.
It’s like writing with a pen instead of a pencil. If you make an error with pen, you simply cross out the error and write the change next to it — the error and change is visible. Blockchain is like using a pen; if it was like a pencil, you could erase or change data without anyone knowing.
One unintentional or unscrupulous piece of data will shake the trust of all business partners. In a blockchain, nothing is ever changed; it is updated, and every update is tracked. Everyone is shown what that update was. For that reason, you can trust all records on blockchain.
Blockchain requires a database administrator
Ok, spoiler alert… that is the lie! But here is the truth. In business-to-business transactions, each business keeps their own set of records. Organizations very rarely keep a shared database. If they did, they would need a database administrator which then requires trusting business data to a single person or organization to keep everything accurate — all the time. This could lead to security risks for your mission critical data, increase costs, and result in a single point of failure.
Blockchain allows multiple parties to have one version of the truth due to its distributed ledger. Unlike databases which require database administrators, with blockchain, everyone is an administrator so there is no single point of failure where information is unknowingly changed. Data is only updated, and those updates are visible across the entire network for everybody to see. Mistakes either by accident or intent are visible, attributable and accountable.
Go forth and educate
Although blockchain technology was invented about 10 years ago, what many people don’t know is that it isn’t a fundamentally new technology, but an innovation in terms of how existing technology is used. Hashing, one of the key pieces of blockchain, has been around since the 1950s — conceived by IBM computer science engineer Hans Peter Luhn.
Great use cases for blockchain technology involve situations where transactions are largely paper-based or a mix of digital and paper, or when there are numerous transaction partners with large volumes of data. One such example is in the food industry, where blockchain can enable transparency thereby being able to help improve food safety, reduce food waste, prevent food fraud, and make our food supply more sustainable.
I hope our new party game, “two truths and a lie” helps you understand the most basic underpinnings and concepts of blockchain and inspires you or others to join the ranks of blockchain technology evangelists who are changing the world.
Read the original article, published January 5, 2019 on Smartereum. Blockchain and Big Data are among the top emerging technologies tipped to revolutionize several industries, radically changing the way businesses and organizations are run. One might assume that these technologies are mutually exclusive — each forging unique paths and applied independent of one another. But […]
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