Blockchain is one of the most-used buzzwords of the modern internet, but as fintech providers adapt the technology to deliver new and secure online services, few understand completely how the blockchain works.
Experts claim the impact of blockchain applications will be enormous, but years may pass before the full effect is felt.
Here, we look over the horizon to understand a little more about blockchain.
What is a blockchain?
The chain is a database of online transactions and the block is each individual record.
No person or organisation controls the database so access is restricted – only the block owner can edit a transaction and if they do change their block, the rest of the chain updates in real time.
Blockchains can be public or private
A private blockchain would be on a banking network, for instance, so each time a customer spends or receives any money, all connected accounts would be updated.
Because the software synchronises transactions, organisations can cut out middlemen and process the details quicker because no third parties are involved.
Blockchain is the next big technology
IT giants Microsoft and IBM have invested hundreds of millions and the time of thousands of staff into blockchain projects.
Blockchain developers have raised more than £1 billion from venture capitalists as nine out of 10 banks explore blockchain applications for their services.
The market is expected to be worth £20 billion by 2024.
Is a blockchain secure?
The adage is any code created by humans can be broken by humans – it’s just a matter of when.
With that in mind, blockchain is not 100% secure but is certainly way ahead of most other applications around now.
Experts say they are most vulnerable to hackers when they first come on line.
Anyone with access to the blockchain can view the entire chain.
What’s the future for blockchain?
Within two decades, blockchain will be a dominant internet technology, say experts, and will disrupt banking and financial services by rendering huge numbers of jobs and processes redundant – but the new wave of technology will also bring new jobs and opportunities that no one has yet dreamed of.