The Simple Idea of Blockchain. Disruptive technology, trustless…
By: Amaka Chukwuma Jubilee
Tags: Fintech, Blockchain, Blockchain Technology, Content Writing, Copywriting

Disruptive technology, trustless system, decentralized, immutable,peer-peer bla bla bla. These are buzzwords associated with blockchain technology that confuses the bejeezus out of many. But it’s a simple concept and an interesting one at that.

In blockchain technology, data are stored in clusters and strung together. These clusters of digital information are in a box and go in tandem — one after another.

Let’s look at it like a database where you store information but instead of in tabular forms, they are in blocks. Each block has a storage capacity that once full, is added to the existing string of blocks. The blocks form a chronological chain. New data are stored in a fresh block.

I have compared the blockchain to a database but it is not a database. It is a digital ledger or data structure where transactions can be processed. Blocks that are formed and chained together are immutable which means they can’t be changed. Each block refers to the previous because when a block is added to the end of the chain, it is time-stamped.

The decentralized nature of blockchain

Three features of the blockchain give it a decentralized nature:

Timestamps: there is a timeline of data. Data collected in groups involve a block with a set of information. Each of these blocks after being chained together is timestamped. This means that if one block is taken out of the chain, there would be a time gap because the timing would be altered. For instance, It would be hard to miss that block A needs to cross-check with a missing block B to get the correct timing of how and when a transaction occurred. Nodes: these are servers that verify and exchange transactions. These computers are operated by different entities all over the world. These nodes must always come to a consensus. At least 51% of changes have to be made to successfully maneuver the remaining nodes. If one node has been altered, other nodes need to cross-reference to fish out where the inconsistency has occurred. This enables users on the blockchain to view transactions that are occurring in live mode. Hash codes: these codes are created by a maths function that turns digital information into a string of letters and numbers. Hash codes will change if any digital information is changed.

This decentralized nature of the blockchain makes it quite safe and protects the system from fraudulent acts.

Why is it a trustless system?

I think that the most confusing of all the confusion associated with blockchain technology has to do with describing it as a ‘trustless’ system. The decentralized nature of the blockchain should strengthen one’s trust in the system. Trustless shouldn’t be a word associated with it, innit?

Trustless in this regard has to do with an absence of the need to trust. The blockchain is built in such a way that each computer can act as a server for the others. This means that every user is allowed shared access to how transactions occur without the need for a central server. Every user has direct access to the information. There are no third parties. In the case of bitcoin, everyone is in control because it’s a public ledger.

Yusuf Fatai-Ayodele a Tech expert explains it clearly in these words,

‘’Trustless means you do not require any trust. Unlike putting money in a bank account, you are putting trust in your bank that it would be safe, it is never like that with blockchain because it is trustless in the sense that you don’t require any trust of anyone or party as the blockchain network is a self-working protocol that executes once the written rules are met”.

I have talked of blockchain in the light of how it is being used in bitcoin. Blockchains do not come in only this form. There are different kinds of blockchains. They can be public, private, consortium, or hybrid. Blockchains can also be centralized or decentralized.

Blockchain technology has continued to gain popularity. This was after it received a lot of criticism from the outset. Some big firms have embraced it and believers in this system think that if government parastatals embrace this technology, transparency would trump corruption. Still, others believe that it isn’t worth the whole fuss. One thing is sure about blockchain technology, we haven’t seen the best one yet. Like with all other technology, it can only get better.