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Blockchain technology is associated by many, and often even equated with bitcoin and other cryptocurrencies. And although digital currencies have helped to glorify this technology, the scope of its potential application is much broader.
For some time, companies and institutions from other sectors have been interested in it:
- public administration
- healthcare
- trade
- energy
Blockchain technology — what does it provide and why was it created?
Blockchain technology became popular in 2017, when the prices of bitcoins and other cryptocurrencies recorded a parabolic increase. Thanks to the latter, in just a few weeks or months, some investors were able to achieve impressive returns, even reaching several thousand percent.
After the bursting of the speculative bubble, interest in the cryptocurrency market temporarily decreased, but the blockchain technology itself, with which most digital currencies are inextricably linked, is actually just beginning its development.
Interestingly, the blockchain technology itself was used for the first time after the next burst of the speculative bubble — in the US real estate market. This event in 2007 marked the beginning of a powerful financial crisis that seriously undermined confidence in banks, financial markets and organizations. In response to a series of bankruptcies, evictions, and investigations, as well as the massive printing of money to save the economy, a man named Satoshi Nakamoto created the Bitcoin cryptocurrency based on the blockchain. However, it is worth emphasizing that the very concept of blockchain technology has existed since 1991, when a group of researchers built a digital document dating system that prevents their modification.
Bitcoin was created to enable secure financial transactions without the involvement of "trusted organizations," transaction fees, and transmission delays. Today, the oldest cryptocurrency is perceived much more broadly, but it is still a blockchain technology that allows it to perform both the mentioned role and all other functions.
Blockchain — definition and essence
By definition, a blockchain is a decentralized database that allows the collection and transmission of information on the Internet with a peer-to-peer architecture. This is a distributed ledger of operations, which is supported not by a single centralized server, but by computers connected to each other in a network. Information about these operations is stored in packets (blocks), which are interconnected by a secure protocol, forming a chain of blocks.
It follows from the above that the blockchain is not subject to a top-down authority and cannot be controlled by anyone. Moreover, every transaction that has been saved in the blockchain remains there forever. All this makes the blockchain an efficient and secure way to store and transfer various information.