Blockchain Is The Future Of Database Technology
As the buzzword “blockchain” continues to make its way into mainstream media, one word that many people are asking is “How does it work?” Well, this article provides a quick explanation of what blockchain is and how it may be helpful to businesses, consumers, and governments.
To begin with, let’s take a look at what blockchain is not. The term “blockchain” refers to an emerging technology that is fundamentally different from traditional database storage or file sharing. Instead, blockchain is a distributed ledger, or a method of storing data and information securely across multiple servers.
Traditional databases are made up of a series of physical storage devices that hold information on paper, tape, or even in some cases in the air itself. When one of these databases is created, it is stored in a single location and then later on moved to another server as needed.
The biggest advantage of this technology is the fact that it does not have any barriers to sharing information with other computers. With traditional database sharing, when two separate computers are trying to access information, they must pass through a firewall before being able to see each other’s information. Because of this, not only can computers on the outside access each other’s information, but computers inside the firewall can also access information from the outside.
However, blockchain offers something completely different than new technology. It allows information to move between computers and servers without creating any of the technical obstacles that other technologies often create. For example, with a traditional database, a company has to make sure that all of its computers and servers are up to date with the same information so that it will not cause a problem when sharing the data.
The most common form of blockchain involves digital tokens called “cryptocurrencies.” Each cryptocurrency, or digital currency, is created through a special type of cryptography that is unique to that cryptocurrency. And because of this, all cryptocurrencies share the same general value.
The way in which blockchain works is that all of the computers and servers that make up the network of these digital currencies are maintained by the same private company called a “miner.” These companies perform complex mathematical algorithms to validate transactions, thus ensuring that the network functions properly. The process used to validate transactions is known as “mining.” However, miners do not create any digital currency, they simply allow the transaction to move through the network.
Once a transaction has been verified, the miners must act as a gatekeeper to ensure that the transaction has moved to the next level of the blockchain network. In the end, the transaction gets integrated into the blockchain and becomes the next generation of digital currency.
However, there is a very limited public blockchain. This is the blockchain where consumers and businesses can actually store and use digital currencies. Because of this, some companies don’t even bother with the privacy and security aspects of blockchain.
Those who invest in the technology typically want to get it to a point where it can be used by a wider audience, and are using private companies to do so. Many in the technology industry believe that the next phase of the blockchain will involve more private, permission networks that will eliminate the need for miners.
If and when that day comes, and eventually everybody uses the public blockchain, there will still be a need for mining companies to run complex calculations to secure the information and the transactions that occur on the blockchain. This is why many blockchain enthusiasts are interested in the creation of a more private version of the blockchain.
The public blockchain is a system that is currently in development by several firms. Because it is too early to determine the final outcome of the public blockchain, many investors are still concerned that the technology may never reach the public market.