The digital revolution in any form is a step forward to make the world a better place to live in. Back in the 90s when the Internet evolved, it was a disruptive and game-changing force for many industries.

One such technology or invention that could change industries again is the so-called Blockchain. Invented by Satoshi Nakamoto back in 2018, this digital revolution is slowly growing in publicity, especially because of the connection with bitcoin, a cryptocurrency, that is talked about in the news on a daily basis . Even big companies like SAP, Bosch or Lufthansa starting to adapt to this invention.

This article explores the Blockchain deep withing along with knowing some of its uniqueness and possibilities. In addition, you will get to know the advantages and how the Blockchain will find Use-Cases in our world today.

How the technological Revolution will impact our jobs

What is the Blockchain?

Basically, the blockchain is nothing different then a decentralized database that saves transactions and is visible for everyone. At first glance, the whole thing does not look too revolutionary and groundbreaking. But the genius of Blockchain will be understood at the latest after reading this article.

The blockchain solves two big problems of our financial system:

Dependence on third: Lets assume you want to send some money to your mate because he is overseas and running out of money. There is no possibility to transfer your money from A to B without involving a company( PayPal, Google Wallet) or a Bank( Deutsche Bank, Bank of England). Regardless of whether you transfer the money with a Bank transfer, PayPal and co., or if you send it by post, there is always a dependency on third.

Double Spending Problem:

In our digital world today, we have the problem that digital data and information can easily be duplicated and easily copied. Digital currencies that consist only of zeros and ones are supposedly easier to copy than banknotes.

How does the blockchain work?

Because this article is not focusing too much on the technical part, i would like to visually explain how the blockchain works to make it easier to understand. Therefore i choose a library as our blockchain.

An old library, as some of you may still know, is an dencentralized Institution with a database, that saves transactions of books, for example who borrowed which book and other informations about the customers like the adress, age, etc. When someone wants to borrow a book that is not available, the book can be reserved and it can be picked up as soon as it is returned to the library. Lets assume you want to borrow a book and the person with the book is living near you. In theory, it would be much faster and easier if you could pick up the book directly form the person. Nevertheless, the book has to be returned to the library first before you can pick it up.

Although it would be way easier, the libary wont tell you who borrowed the book, because only the library has access to the database.

Our new blockchain library, lets call it Librarychain, doesnt contain a central database or a place, where the books are stored. It consists of people that have books to borrow and other people that want to borrow them. We need to ensure that each member of the blockchain has information about who has borrowed which book. This is achieved with the help of a decentralized database, in which each transaction is visible and each database is updated during a transaction, so you always know when someone is borrowing a book.

As the name of the technology already states, the blockchain contains blocks that are joined together to a chain. Many books are borrowed and returned from our new LibraryChain. This results in many transactions that are combined into blocks. Each new block points to the last block and is attached to it, so it has a chain of blocks called Blockchain.

In order for the blockchain to work properly, so-called miners need to validate the transactions, summarize them in blocks and attach them to the blockchain. An elaborate procedure named proof of work is used for this purpose.

Proof of Work:

Before new blocks are added to the Blockchain or transactions to a block, a heavy and elaborate task must be solved. This task can only be solved by guessing the right solution. Every miner tries to solve the task as the first one to guesses the new block to the Blockchain and get a reward for it. This makes it almost impossible to forge and manipulate the transaction, since the associated computational effort for each transaction and each block is extremely high. If you try to change a transaction in an older block, the proof of work procedure for each subsequent block must be re-rendered.

Advantages of the blockchain:

No Dependence on third:

The blockchain will make it possible for the first time to carry out transactions without the participation of third parties. In addition, cross-border transactions can be conducted without high fees, exchange rates and without the government or state controlling the flow of money. Particularly poor countries can benefit from the blockchain, as many banks and governments are corrupt and lack the confidence of the population in these. They would benefit from the security and transparency of the blockchain and would eliminate the confidence in central institutions.

Decentralization:

Centralized institutions are very vulnerable to attacks, corruption and manipulation, because an attack on a central server can erase or steal all customer data and transactions. A blockchain is distributed on various databases on different servers, which protects against hacker attacks and other risks. In addition, everyone has access to every transaction, which creates transparency and security. For central databases, only a specific group has access, so that all other groups have to trust them and are dependent.

Transparency:

Each network member of a blockchain can see and verify every single transaction. It is obvious to anyone if someone tries to manipulate or subsequently change a transaction. Also, transactions can not be changed or manipulated and it is now possible to track transactions in real time.

Use cases for the blockchain

Supply Chain Management:

The entire logistic sector could be revolutionized by the blockchain, as it would be possible to track products and their components across the entire supply chain. Tracking of packages and deliveries could be tracked through the entire path. As a result, packet losses could be avoided since each transaction etchings is stored in the Blockchain and the path of each packet is comprehensible. In general, the blockchain processes in the logistic sector can be accelerated and make them safer and more transparent

Mobile payments:

By using cryptocurrencies based on the Blockchain, it is possible to pay cashless with the mobile phone. Only one wallet is needed on the mobile phone and no third party is switched on.

There are many more possibilites, where the blockchain can find a brilliant use-case. It will be interessting to see how the different industies will adapt to this technological revolution.