What is Blockchain and How Does It Work?
What is Blockchain technology and how does it work? What kinds of transactions can be made in a blockchain? What are the risks of using blockchain? We answer all these questions and more in this blockchain video.
00:00 - What is Blockchain technology?
00:49 - Types of blockchain transactions
01:15 - What are the main risks of blockchain?
01:41 - Blockchain’s potential
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Blockchain Technology
A blockchain is a digital, decentralized database that tracks and records the transactions of assets. Uniquely, blockchain technology serves as a kind of public ledger where everyone can see the transaction chain - thereby making it more difficult to steal or cheat the system.
Think of each individual transaction as its own “block.” Once a transaction is made it forms a single “block,” which is then grouped into a field of similar transactions - forming a chain. This “blockchain” of data is stored in the field, allowing anyone to trace the transaction back to its original source. Critically, each link in the chain is permanent, which strengthens the entire chain as more blocks are added.
What kinds of transactions can be made in a blockchain? Virtually anything. From tangible assets like cash and cars… To intangible assets like copyrights, online orders or cryptocurrencies… Many see blockchain as the favored arena for speedy, secure transactions. And because the very nature of blockchain is a direct user-to-user interface, it also eliminates third-party bank fees as well as tons of red tape.
That said, there are fundamental risks to consider. For example: a public blockchain could potentially expose the data of any members who are a part of that chain. The lack of any centralized authority in blockchain also means that virtually no regulations exist - which also goes for law enforcement. These risks are among the reasons why businesses have generally been slow to adapt blockchain tech into their customer models.
Still, the potential of blockchain is seen as an exciting frontier. Some governments have even experimented with their own national blockchain networks to streamline public services like healthcare, local currency, and even anti-corruption. You can’t directly invest in blockchain technologies for now. But as companies continue to explore their own blockchain applications, it could easily become a crucial player in the not-so-distant market.
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