What is Blockchain? Unravelling the mystery

Today, we hear a lot about fake news and information overload, particularly on the internet.  But what if there was a way for people to have access to data so that the ‘truth’ of the data was preserved?  Enter distributed ledger technology (‘DLT’).  Many readers will have heard of ‘blockchain’ which is one form of DLT and is the focus of this article.   

Blockchain has its roots in cryptography and encryption technologies.  Historically, the purpose of cryptography was to secure data for transmission using encryption so that only those recipients with ‘keys’ could decrypt the data and use it.  Encryption ensured data integrity and confidentiality.  Encryption built trust because the sender could not repudiate the transmission.  But with a key the data could not only be viewed but altered which potentially undermined the data integrity.  Now, through Blockchain, data is still secured but the technology dispenses with the key.  Instead it enables anyone to view the data but with limited rights to alter the data.   

How does it work? 

Simply, blockchain technology uses a ‘chain’ of ‘blocks’.  Blocks consist of encoded information about a transaction.  The Blocks are pushed to ‘nodes’, part of the computer network for publication.  A node receives a block, verifies the block and adds it to the chain of record.   

Let’s take a simple use case – you buy something valuable: 

·       The block stores information about who and what is involved in the transaction; 

.   The information is encoded using a digital signature, thus no personal identifying information is involved;   

·       Each block has a ‘hash’ that enables that block to be identified from another block; 

·       The block is ‘published’ to the node and forms part of the ‘Blockchain’ which is capable of being searched.  The chain of blocks is stored chronologically; and   

·       If you want to change…

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