‘Bitcoin’ and ‘Blockchain’ are today the most discussed topics in tech circles. To give you a perspective, the word ‘bitcoin’ was the most searched word on the internet in 2017 and Blockchain is the most in-demand skill (among 5000 skills) according to the latest Upwork survey. There is a lot of confusion among people about Bitcoin and Blockchain. A lot of people think they are the same. Let me start this article by first clarifying the difference. Blockchain is a protocol that enables decentralised and distributed storage of information whereas; Bitcoin is the first use case on the Blockchain protocol.
What is Blockchain? Let’s try and understand the phenomenon that is Blockchain.
Blockchain in simple words is a shared, trusted, public ledger of transactions, a sort of distributed database that maintains a continuously growing list of transaction data records, cryptographically secured from tampering and revision.
Blockchain is referred to as the ‘decentralized web’ or more famously as the ‘Internet of value’ (a term coined by Don Tapscott in his book ‘Blockchain revolution’). The Blockchain is a novel solution to the age-old human problem of trust and in eliminating middlemen. It uses a combination of three elements: Peer-to-peer networks, Cryptography and Game theory to achieve the objectives of transparency, immutability and ensuring there’s no single point of failure.
Before Blockchain, buying and selling required an intermediary, a bank or broker who housed your financial data in their computers. When you transfer funds or make a purchase, a banker connects to the bank’s system to record the change. Blockchain replaces this central system with a decentralized ledger of chained records. Each record is connected to the one before and the one after it, yielding a traceable history of every transaction. No record can be deleted and no existing records can be altered.
Key Benefits of Blockchain
- Time savings in complex multi-party transactions
- Huge savings in costs because intermediaries and duplication are eliminated
- Tighter security because of cryptography and shared ledger
- Enhanced privacy
- Improved auditability
- Increased operational efficiency
Examples of existing Blockchains
There are many Blockchain protocols, but prominent among them are bitcoin Blockchain, Ethereum which are public Blockchains and protocols like Hyperledger and Corda which are permissioned Blockchains
The biggest challenge is power consumption. To give you an example, Bitcoin Mining is expected to Use 0.5% Of World’s Energy By End Of 2018 (Source: Gecko Research). Some of the other challenges are as follows:
- Regulatory Uncertainty
- Time taken for widespread adoption
- Industry consensus
Is Blockchain technology ready to change the world and are we ready for it?
Blockchain technology is evolving and hence comes with its own set of challenges as seen above. Blockchain is today where internet was in the early 90s but it is expected to be adopted faster and make an impact on our everyday life as early as 2020.
As a society, we’re experiencing a time of unprecedented technological change and Blockchain is leading this change
About the author:
CEO, InteliTix Solutions Pvt. Ltd.
Satish Salivati is the co-founder & CEO of InteliTix Solutions Private Limited. InteliTix offers Blockchain solutions to enterprises. Satish and his team have won prizes in multiple national and international Blockchain Hackathons. The InteliTix team has also executed Blockchain projects for different customers. A keen contributor to the Blockchain eco-system in Chennai, Satish speaks in various Blockchain forums across the country and is also a faculty in India’s top Blockchain course.