With time comes change. With change comes anxiety. Mostly at the thought of coping up with change. And leading the wave are new (relatively) age technologies – artificial intelligence, virtual reality and blockchain technology to name a few. And just when we thought the last of the lot was done reaching out with its tentacles, there’s more. A South Korean film festival recently announced plans of going online, later this month. With every second headline mentioning blockchain technology, here’s what the fuss is all about.
Blockchain. What’s that again?
Think about a bank locker, with different in-built compartments. Five members of a family have separate keys to the lockers where each of them stores a certain amount of cash. Apart from them, there’s no one that knows how much money the locker holds at any given point of time. Family of course knows who amongst them has deposited how much money and when.
That’s basically how blockchain technology works.
The blockchain process centers around three fundamental pillars – distribution, decentralisation and transparency.
Like the locker, access to a particular document is given to all people involved in the process. Why? So that there’s no scope for someone to duplicate that piece of information and spread it around claiming originality. All the originals are handed over to people who have the authority to gain access to it. Something like your Google Doc. No authority? No sharing.
There’s no single person who can claim access to the piece of information. Like the locker for example, all the authorized personnel have their own keys. No dependence on any one person and his keys.
Since access is granted to the entire family, everybody’s in the know to the contents of the locker. There’s no hidden compartments. This makes the process of saving cash (or whatever you may please) in the locker, transparent.
Just like the locker in our case was made of different in-built compartments, the blockchain is made of…well, blocks. Each block is made up of information. On an average, this information pertains to the date and time of the transaction, and the amount transacted. It includes participants of a transaction as well.
The distinguishing factor of a specific block is the particular code.Or hash. This code is unique only to a particular block and helps us distinguish between blocks. For example, names we give to human beings. Or Dogs. Names.
Now each block holds numerous such details of numerous such transactions. It’s just mine or yours, but information enough to fill up nearly 1MB of data space.
How does it work?
Say one fine day, a member of that family decides to go to the bank. Just for a stroll. Or perhaps to take some money out from the locker. Once that person lands up there, with her key, the bank officials start rolling. They welcome her, firstly. Manners.
Next, they ask for her identity card, verify it. Then scan her using a detector perhaps. Check previous records. Make new entries in the record book. Verify the locker key she’s carrying. And once satisfied with the details, they let her in to access the locker.
In a blockchain, the main trigger is a transaction. Say you order food online. As soon as you finalise the order, for a particular charge, the other computer systems on the blockchain will start rolling. They will verify if the order has been taken down, whether it reached the exact source. Whether you paid the right amount or more. Whether all the identities of the people involved are verified,and so on. Once this verification is done with, all this data is then moved into a BLOCK. Along with tons of other data in that block, related to other people. The entire block is then sealed with a ‘hash’.
Well for starters, each block has two codes. One is its own unique hash. The second, the that of the block before it in the chain. Similarly, the block after will have its own code, as well as that of the block before it. For a hacker then to hack into a block and change the information inside, he or she will have to know the exact sequence of the blocks and both the codes. Like a password, if you may.
So if I, a hacker, want to mess with the data in Block B, I need to mess with the data of Block A too. Why? The hash of every block is calculated using the data in that very block. If I change ANY information in it, I’ll be changing the hash of that block too.
It’s like taking a carefully put together recipe of say, Apple Pie, and changing an ingredient in it. And adding salt instead of sugar. The Person handing over the recipe to you will automatically get suspicious. And so will the person eating it. Everyone knows Apple Pies aren’t salty, right?
In case of Bitcoins, for example, this key or password business comes into play too. Blockchains may be public. And the data recorded on it too. But partially. For example, in a blockchain, the user isn’t identified by our name, biometric data, etc but some form of derived key. Again a result of algorithmic calculations. In using Bitcoins, each ‘wallet’ that someone uses has two cryptographic keys. One is a private key, and the other a public key, which is in fact a short form of the private key. The public key is used for transactions. This is also the key that appears on the blockchain ledger.
A distributed ledger is the term given to a database that is shared widely and with consent with people all across the world. By people, these don’t necessarily mean individuals, but also institutions. Anyone can have access to it, as long as you have an internet connection.
All these computers that are on the blockchain ledger have their own copies of the blockchain. These copies are identical, yes. But mind you, there are thousands of such copies. How do you even manipulate them in each and every copy?
And not everyone can hop on to the wagon. For a user, or a computer to join the blockchain and on effect add blocks to the chain, there are tests it needs to pass. Called the Proof of Work. But we’ll let that rest for now.
Where can it be used?
A ton of places actually.
Banks – it’ll take mere minutes to get through with your transaction. Which isn’t technically the time taken for the transaction per se, but for the block to be added to the chain. Monday or Sunday, demand drafts or cheques, expect easy transacting.
Healthcare – not only will accessing health records become easier, but a lot more confidential. Once verified and signed by your doctor for example, the records are fed into the blockchain. Making it near impossible to tamper with again.
Law and legal – those of us who’ve been in the offices, dealing with officers, only to get certain records passed and signed, know the pain of it. With blockchain, not only will this get easier and quicker, but the never-ending debate of ownership surrounding a number of these transactions, resolve themselves too. Of course, this extends to all sorts of legal documents.
Election – well, need we say more? During times where we’re surrounded by headlines and prospects of election tampering, blockchain comes as a relief. Blockchain will ensure transparency in the electoral process and ensure your vote goes exactly to your candidates.
The arts – Employing blockchain basically does away with the need for a middle man. And think about the advantages the mere doing away with the middle-men, can bring – or the disadvantages to some. Publishing ebooks, releasing music, etc will no longer be at the mercy of websites and streaming platforms.
This was a mere selection of some of the sectors blockchain can be employed in. If you were to Google the term, a thousand more will show up. Either way, with the intention of slightly nudging you into the world of blockchain, was this of any help?