The B word. What’s the fuss all about?

Normally, blockchain is explained by complex technical terminologies that no one really understands. But it doesn’t need to be. It can be put in simple words.

I mean, let’s start by breaking down the term "blockchain" into two parts: block and chain. A block is a collection of transactions that occur on a network. The chain is formed by connecting blocks in such a way that the following block includes the hash (think of the hash as a digital signature) of the preceding one. Even minor changes in the preceding block might change the next block’s hash and disrupt the entire chain, making data tampering impossible. Everything is transparent this way.

Blockchain is not a form of money or definitely not the same as cryptocurrencies. Like a website vs. the internet, it is powered by the underlying technology. It is simply a network that unifies many data sources (such as consumer data, internal process data, or supply chain data) in one place for reliable and accurate data exchange. Since it doesn’t use a third party to gather data, nothing is lost in transit from your consumer to you. So goes the phrase ‘everything is on-chain for you to see’ or ‘it is decentralized’

There are some prerequisites that help you understand blockchain vs conventional databases better, like why cryptography, non-fungibility, and digital signatures are growingly important in this modern world, but the purpose of this blog is to keep things simple, so let’s ignore these terms for the time being.

In the last five years since this appeared in media, most of us have at least once thought about profiting from cryptocurrencies like bitcoin as they continue to rise in popularity. There’s no denying that. That 3x return in just 3 months looked juicy.

What if I told you, however, that the greatest potential for you as an individual or a business owner is really connected to the blockchain technology, which powers bitcoin? Yes, this public database, which contains a record of every transaction, is more than simply a passing trend; it’s a revolution.

If we try hard enough, we can summarize the benefits of a blockchain within these five themes; Security. Decentralization. Reliability. Speed. Competitiveness.

I’ll pick one from here: Decentralization will rule the world!

I won’t bore you with the theory. For example, in agriculture, a farmer trying to sell his produce directly to the market-

In the current system, middlemen filter communications. With limited computer knowledge, blockchain can connect these farmers to customers, business partners, and other members of the network directly and transparently.

With no need for a third party, this enables information to be transferred more quickly and accurately while saving money for the farmer. Those pesky fat commissions taken by the middlemen disappear.

Or let's take a more dynamic example like an auction;

In a physical auction, objects are offered for betting, and the winner pays and removes the items. But there would be trust concerns if we were to implement the same auction online. What happens if someone wins the bet by claiming $10,000 but remains silent when it comes time to get paid?

Blockchain enables us to manage such incidents with ease. A token amount will be taken from a user’s account and saved in the smart contract during the betting process. These transactions employ a private key and get signed on chain, making it impossible to claim that such transactions never took place in the future.

Online games like tic-tac-toe is another straightforward yet spectacular solution we can relate to where both participants deposit ‘X’ amount in the smart contract. Every action taken by a player is recorded on the blockchain (each action is digitally signed), and smart contract logic constantly verifies each action. The smart contract will select the winner in the end. The winner can then collect their prize.

• Nobody else decides how you play
• One cannot possibly cheat
• There are no scams; the winner is always rewarded
• Everything happens in real-time, is not location-bound, and is non-fungible.

Once you understand what this means, seeing the practical real-world applications this technology could bring in the next couple of decades will become easy. I will say it again, it’s a revolution.

But as with every new tech that’s ever come out, there is criticism, skepticism, and plain neglect for this tech. Why?

“First they ignore you, then they laugh at you, then they fight you, then you win”

It’s important to understand where to use blockchain, but it's more important to know where NOT to use it. If you got washed away with the hype and tried onboarding a random blockchain application into your app without no specific purpose, you will be upset. It is crucial to know WHY you need a blockchain integrated into your business operations at this moment.

Let’s see a few cases where blockchain technology wouldn’t apply:?

• If there is no use for a database in your system
• There is a database, but it is a mix of online and offline
• If the transactions getting input don’t have a relation to each other
• If a centralized party needs to have read and write to a database?

Anyhow, this was supposed to be a blockchain for beginners blog, and for that reason, I’ll wrap it here. Every now and then, a tech makes a grand entrance and claims how innovative it is and how it will revolutionize society. I think Blockchain will. But is there data enough presently to support that? Don’t think so. The tech has been around for a while, but only recently has it begun to gain popularity and mainstream adoption. Will blockchain pass the test or will it falter after a few lessons? Time will tell. And so will I as I keep writing more blogs on this topic. Until next time, folks!