Have you heard of the word blockchain? I bet you did. It became a buzzword in the last few years, appearing each time somebody mentions bitcoin, cryptocurrency or many other data sharing innovations. It was even called one of three sexiest world in FinTech, according to Chris Skinner.
Still, the Internet is lacking simple guides to the blockchain technology. Using difficult words and complex formulas don’t help – you just feel even more overwhelmed than before reading them. So what do you need to know about blockchain? And how to use it to enrich your mobile app performance? Here are your answers!
The whole idea is based on the two words the term blockchain consists of: blocks and a chain made of them.
A block is a permanently recorded set of data in a digital ledger. A good example can be a transaction between person A and person B for a certain amount of money – a block here consists of a nickname of the giver, a nickname of the receiver and the amount of money transferred, and once encrypted, it is stored on every computer in the system.
Blocks are stored in a chronological order and such a chain of records is called a blockchain. The order is here extremely important as each block has to contain a link to a previous block. Thanks to these links, it is impossible to add any block between other two without being noticed and hence – the whole data system is secure.
Unlike traditional services like bank transfers or renting a flat or a taxi via app, blockchain doesn’t need a middleman to operate. When you want to make a bank transfer to your friend, it may seem that you make it yourself – you just choose the amount of money, the data of a receiver, and click a “send” button. But in fact you are having your transfer made by your and your receiver’s banks.
With blockchain, the idea is that you don’t need a Big Brother to make a transfer. Why? Because the transaction is recorded in the network of other users’ computers in an encrypted form and guarded with sophisticated mathematical formula so that nobody can change, delate or add any record unnoticed. This way, the system is itself a guardian of its members fairness.
Can blockchain be only used in transferring money and fintech apps? Not at all! The technology is now more and more commonly used in very different branches and you can also make use of it in your app.