The complex definition of blockchain technology gives pause to most individuals attempting to understand it. With definitions ranging from “a list of records that are linked using cryptography,” to “the technology that records bitcoin,” blockchain is a complicated topic to approach.
The concept of blockchain is much easier to understand than the definition makes it seem. The simplest way to describe it would be as “blocks” of digital information that are stored or “chained” together in a public database.
The most common way to look at the information that is saved by utilizing blockchain technology is through transactions. When a consumer makes an online purchase, information about the transaction will be stored into a block. That information includes the date, time, and dollar amount of the purchase. In the same way that your online social media profiles have a username, the blocks also record a digital signature or username to identify the participants involved.
In addition to information about the transaction information, the block also contains a unique code, called a hash, that distinguishes the blocks from each other. When a consumer may make two seemingly identical product purchases, the unique hash code would allow you to tell the transactions apart.
Each block in this blockchain technology can store up to one megabyte of information which translates to a few thousand transactions.
Adding to the Blockchain
After data is stored, there are a few things that must occur for that block to be inserted into the blockchain. Each of the blocks that are strung together had to go through the same steps.
- An Online Purchase. In general, a transaction must happen in the first place to add the information into the blockchain technology. Without a purchase, no data needs to be stored.
- Verifying That Transaction. Blockchain technology utilizes a network of computers that go behind and confirm each detail pertaining to the transaction such as the purchase time, how much money was used, and who made the purchase.
- Storing in a Block. The information is set to become stored and join thousands of different purchases within a block.
- Unique Hash Codes. Everything will be verified and stored within the block. To ensure that the block can be identified, it is given its hash or unique code as well as the hash of the most recent block that was added to the chain.
Uses for Blockchain
Blockchain technology is useful for consumers and businesses because the information will become publicly available as soon as the chain is created. Anyone that needs the data can access it without issue. Not only is this technology fully automated, but it is secure as well.
Offering Blockchain Technology Solutions for Your Business
SharedLABS offers a range of development services using blockchain technology. Our team will gain an understanding of how a company operates and will formulate opportunities where we can apply blockchain. Contact us today and take advantage of this emerging technology.