Bitcoin and beyond: Blockchain — the new revolution in technology
If you follow tech news even occasionally, I am sure you would have come across the word Bitcoin in the last few weeks. In this post, I want to explain some basic elements of Bitcoin.
- Do you know what Bitcoin is?
- What base technology is used in it?
- What are the hidden potentials of Blockchain?
Origin #
Satoshi Nakamoto was the inventor of the Bitcoin protocol, publishing a paper via the Cryptography Mailing List in November 2008.
Nakamoto (who I’m going to refer to as “he”), a shadowy figure, whose identity — or even gender — is unknown, then released the first version of the Bitcoin software client in 2009, and participated with others on the project via mailing lists, until he finally began to fade from the community toward the end of 2010.
He took care never to reveal anything personal about himself, and the last anyone heard from him was in the spring of 2011, when he said that he had “moved on to other things”. As of 17 December 2017, Nakamoto is believed to own up to roughly one million Bitcoins, with a value estimated at over USD 19.4 billion.
Bitcoin #
Bitcoin is a digital currency and a public ledger. Often the ledger is itself mistaken to be a blockchain. That’s not entirely true. As a ledger, Bitcoin is a type of blockchain. Blockchain, as a whole, is the technology underlying Bitcoin. In other words, Bitcoin is enabled by the “blockchain” technology.
“It [Blockchain] is to Bitcoin, what the internet is to email. A big electronic system, on top of which you can build applications. Currency is just one.” — Sally Davies, FT Technology Reporter
Here are some facts on Bitcoin to get you interested. As of 03 January 2018,
- if you had purchased Bitcoin worth of ₹100 in 2010, it would be worth more than ₹3.5 crores now
- The current value of 1 Bitcoin is $15000
- Bitcoin Value by end of 2018 is estimated to be around $40000
- John McAfee, founder of McAfee antivirus software, said he would eat his d*ck if Bitcoin doesn’t reach $1 million by 2020
Interested enough? Let’s move on then to what made the above possible — Blockchain.
Blockchain #
By definition, Blockchain is an open, transparent, distributed ledger. That’s it. Nothing more. Nothing less. But if you still feel confused, let me explain what that definition means.
Here’s what Vitalik Buterin, the co-founder of Ethereum (an open-source, public, blockchain-based, distributed-computing platform featuring smart contract (scripting) functionality) and of Bitcoin Magazine says:
“A blockchain is a magic computer that anyone can upload programs to and leave the programs to self-execute, where the current and all previous states of every program are always publicly visible, and which carries a very strong crypto economically secured guarantee that programs running on the chain will continue to execute in exactly the way that the blockchain protocol specifies.”
Still blinking in confusion? How about we take a look at how the World Economic Forum describes blockchain with this video right here?
Makes a little more sense now? Deloitte explains blockchain as something like this:
You (a “node”) *have a file of transactions on your computer (a “ledger”). Two government accountants (let’s call them “miners”) have the same file on theirs (so it’s “distributed”). As you make a transaction, your computer sends an e-mail to each accountant to inform them.
Each accountant rushes to be the first to check whether you can afford it (and be paid their salary “Bitcoins”). The first to check and validate hits “REPLY ALL”, attaching their logic for verifying the transaction (“Proof of Work”). If the other accountant agrees, everyone updates his file…
A pretty decent overview of the system. You must, by now, have a clear picture of what Blockchain is and what it can be turned into.
Applications #
The world has already started reacting to this massive revolution.
Republic of Georgia has put all land records on a public ledger — the blockchain. The minute there is a change in ownership, it gets recorded publicly.
The Australian Securities Exchange (ASX) announced that it would move Australia’s equities clearing and settlement system onto blockchain.
ICICI Bank executed India’s first banking transactions on blockchain in partnership with Emirates NBD. It has undertaken pilot transactions in international trade finance and remittance on blockchain.
Ascribe lets artists upload their own digital art, watermark it as the definitive version, and transfer it.
Dubai’s government signed an MoU for implementing citywide blockchain-based payments with Avanza Solutions.
These are just a few examples of the many applications and areas blockchain is expanding its reach to.
The Future #
Blockchain is creating the biggest paradigm shift the world has seen since the days of World Wide Web. And it’s here to create the revolution that will blow your mind.
Don Tapscott, the author of many business and economics books and also the lead author of Blockchain Revolution, says:
“The technology likely to have the greatest impact on the next few decades has arrived. And it’s not social media. It’s not big data. It’s not robotics. It’s not even AI. You’ll be surprised to learn that it’s the underlying technology of digital currencies like Bitcoin. It’s called the blockchain.”
Needless to say, we’re going to witness a revolution. The exciting part is that we also get to be a part of it. Let’s see what the future holds for blockchain and what it can bring to the world today.
Mohan AC, a true technology buff and a B.E. in Electronics and Communication, leads our iOS team at Influx. A full-fledged Apple fan, he has built applications for large brands like Lakme and Lenskart. He also made a successful foray into entrepreneurship with CanCan.