With so much talk of Blockchain technology in the online media, some would be quick to dismiss you if you tried to ask this simple question; does Blockchain technology work? But the truth is that there is so much talk of the potential applications of Blockchain to the point that the current applications have been obscured leaving you to wonder whether there are any at all. Does the technology have any present use or should you simply wait for the future?
If you have been following technology sites, by now you must be aware that Blockchain is applied in smart contracts, digital identity, record management, supply chain management, election management, audit trails, large scale cross border payments and the like.
For the avoidance of doubt, Blockchain technology has so far been used in large scale with cryptocurrencies. This is not surprising because the whole idea of Bitcoin and Blockchain are intertwined to the extent that you cannot talk of Bitcoin without mentioning Blockchain. You probably have heard of Satoshi Nakamoto. He was behind the idea of Bitcoin, a digital currency designed to work on a distributed ledger known as Blockchain. This explains why the application of Blockchain in Bitcoin and similar digital currencies has succeeded remarkably.
The Bitcoin Ecosystem
Having said that Blockchain technology was actually invented to power Bitcoin, it is only just that we explain how the Bitcoin ecosystem works. The ecosystem is composed of a shared public ledger known as a Blockchain. To transact on the network, you will need a Bitcoin wallet because every transaction involves a transfer between these wallets and is included in the Blockchain. Every wallet has a private key to ensure that nobody can spend your Bitcoins without your authority. All transactions are broadcast into the peer-to-peer network where miners are working day and night to confirm any new transaction. Mining is important because it ensures that all transactions are recorded on the Blockchain chronologically, protects the neutrality of the network and ensures that different computers agree on the state of the system at all times.
To start using Bitcoin, you simply need to install a Bitcoin wallet on your computer or mobile phone, therefore, generating your first Bitcoin address. You can then purchase Bitcoins and store them in your wallet for use whenever you need to. Despite the relative success of Bitcoin compared to other digital currencies, it has been largely ignored by many merchants who prefer conventional currencies for very valid reasons.
Other Digital Currencies
Several digital currencies have tried to mimic Bitcoin making it the de facto standard for cryptocurrencies-talk of the US Dollar in conventional currencies. Today, there are more than 1324 of these alternative digital currencies collectively referred to as Altcoins. Top among them are;
Blockchain technology has also been experimented and found to work in the following sectors;
- Software as aSservice (Microsoft Azure)
- Data Storage (Factom)
- Health Care (GemOS)
It is now clear that blockchain technology actually works and it’s not just about what it can do in future.