What is a blockchain?

When most people hear the word blockchain they think of cryptocurrencies like Bitcoin. Bitcoin is the first thing to use blockchains in a big way but blockchains can be used for many things.

Blockchain

What can a blockchains be used for?

We all know Currency is one but anything that could benefit from a decentralized unchangeable data record could make use of the technology. One thing I heard about was a blockchain for property titles. Using a blockchain the ownership could be transferred immediately without the costly addition of third-party verification. This process would also reduce fraud. Just like with bitcoin you can’t fake that you own coins. In the same way you would not be able to fake owning property in order to sell it to someone.

The same kind of process could in theory work to protect Intellectual property, medical records, Identity theft protection, election votes, and many other things

How does a blockchain work?

A blockchain is a distributed ledger. Each block in the chain contains information. The blocks are linked together in such a way that you can not modify a block without breaking the chain.

The way it works is like this. You start with a block. This block can hold whatever kind of information in it that you want and it also includes an cryptographic hash of the last block and a hash for itself. When you add a new block to the chain it will ones again include the last blocks hash and its own hash.

So if you try to modify the data in a block then that blocks hash will also change. When that happens the blocks that come after it will no longer have the right hash. At this point, the modified block is rejected by the rest of the blockchain network. This is how the blockchain prevents anyone from tampering with the data.

BlockChain

The Size Problem

One of the first questions I had, when I was learning about blockchains, was what do you do about the ever-growing size of the chain? The chain never stops growing and at some point, it will become too big for the average computer to even store it. So far I have not really seen a good answer to this question. I have heard theories on how to cut off the end of the chain but no details on how something like that would work. Or how it would be done on a live network like bitcoin.

51 Percent Attack

Another problem is known as the 51 percent attack. If one entity like a government was able to control over 50 percent of the blockchain network they could add bogus data. stop new blocks from being confirmed, and maybe even modify data. In a sense, they could outvote the rest of the network in saying the changes were legit.

Not too long ago a hacker live streamed a 51% attack on the BitCoin Private cryptocurrencies to prove how easy it was. Vertcoin has also be attacked by a 51% attack.

Are Blockchains The Future?

Maybe one day. But not as they are right now. I do not think current flaws allow for long-term sustainability. But who knows what new information will come out tomorrow!

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