Odds are you’ve heard the terms “Bitcoin” and “cryptocurrency” thrown around pretty liberally over the course of the last year at the water cooler or from a passerby. These are two fairly recent buzzwords to emerge in non-tech circles. If you’ve had discussions about these topics, I would venture to guess that the word “blockchain” almost certainly has come up as well. The blockchain among other technologies is much more than a tool for distributing digital currency, it is a system for safe decentralized transactions of any kind. Hearing coworkers and like-minded friends talk constantly on the topic, I figured I should do some research of my own.
Blockchain is often described as a distributed ledger which lives on the machines of all those who participate in it. This distribution increases transparency in a sense and ensures the safety, both from manipulation and removal of these transactions. Blockchain works in a very linear way, where each “block” or transfer of data is built upon the last creating a chain. To ensure that these transactions are valid, multiple other participants verify or refute other transactions, when a block receives an approval percentage over 51 percent it is one step closer to being added to the chain. There is an additional layer of protection, to prevent malicious persons from altering this data. A special group of individuals, often called miners, that perform operations on each block to confirm it’s authenticity. Once this is completed the block is finally added to the chain. This verification renders tampering within the blockchain relatively impossible with today’s computers.
While transfers of currency are widely thought to be the most practical use for this technology, innovators and forward thinkers are constantly determining new ways for this tool to be put to use. With voting authenticity and firearm access being the hot button topics they are in today’s climate, these are two of the most constructive applications of this tool. Blockchain could be used to flawlessly verify the chain of trade a firearm flows along. It could also be used to ensure that one’s vote remains it’s integrity thanks to the immutability of the blockchain.
One of the chief concerns with blockchain is the disconnect it faces between the physical and digital world. Once things are up and running on the digital end, data is essentially free flowing and safe from abuse. However, there is a always room for human error in getting it there. This highlights that blockchain is not a catch all solutions for data 100 percent data accuracy, as this reality may be impossible. Another worry surrounding the blockchain is speed, this can be better displayed with a graphic relating cryptocurrency transfer time over the blockchain versus that of Visa and PayPal.
Perhaps the most frightening aspect of the blockchain goes back to it’s verification process. If any 52 percent of participants confirm an inaccurate transfer, it is deemed to be valid. This becomes an issue if a number above this threshold is working in unison. This issue could effectively compromise all of the data in the blockchain, making the technology rely on the fact that it is decentralized as a safety mechanism. However there are several fail-safes in place to make sure the chain is not broken.
With all of its potential, it is easy to see why blockchain is such a hot topic. With its inherent flaws it is easy to see why it has competition which seeks to build on and improve it. Two front runners in this arena are Tangle and Hashgraph.
The Tangle is similar to the blockchain in that it uses a confirmation system powered by other participants but rather than relying on “mining” as a second line of defense, the tangle relies on the number of confirmations a block has. This exponentially speeds up the process of transferring data, unfortunately this also creates a similar vulnerability to that of blockchain but at only 33 percent control.
Hashgraph is different from both of the other technologies in that information is passed from node to node in no particular order, and the most often occurring information is deemed to be valid, while anomalies are ruled out. Hashgraph also shares information about how accurate each participant is to increase the likelihood of authentic data being shared. This technology claims to be incredibly fast and secure but has yet to be used publicly for open inspection so there is a degree of speculation surrounding it.
These new applications have the power to reshape the way we do things, the rate at which they are adopted could increase dramatically in the coming years or it could come to a complete stop. Either way, it is best to be aware of these technologies so that you can be prepared for the changes they bring.
Software Engineer Intern