It’s been merely a decade since the first blockchain as we know it was introduced by Bitcoin’s mysterious founder Satoshi Nakamoto. Having had so little time to prove its mettle, it can still be considered an emerging, nascent technology. In the world of technology or business, ten years worth of time is akin to no more than a few seconds and definitely not enough to prove its worth.
Yet, we have already begun embracing blockchain, reposing trust in it and using it for purposes that require the staunchest of security and the greatest of confidentiality. Tech companies around the world have been using blockchain for a variety of purposes: for supply chain management to banking, from data management to handling insurance disbursement. Blockchain has the potential to substitute pre-existing systems in industries such as banking because of the immense business benefits it offers and the great deal of efficiency and speed it entails.
Why do we trust it so much?
Blockchain allows for level of transparency and security that’s nearly unprecedented in our history of technologies. The blocks containing the information are chained up to one another by imprinting every block with a unique fingerprint as well as that of the preceding one. This makes sure that the transactions are records are stored very securely. In addition, since the blocks are so inexorably linked, where you can’t change one block without affecting the entire chain, information cannot easily or ever be deleted or edited. This immutability breeds transparency, because it makes it possible to see how information was updated and recorded without any unscrupulous modifications.
In addition, this technology is very flexible because blockchain can be created using open-source codes and designed to suit the use case one is trying to achieve. Its flexibility and the fact that it’s open source contributes greatly to its immense popularity. Besides, the trust quotient is increased further because of the very way in which blockchain stores records. Since a blockchain network is connected to several node computers that work together by consensus to validate transactions and information updates, the record-keeping follows a decentralized model. There is no central authority you’re having to depend upon and this trustlessness is the very feature which makes blockchain such a trusted technology.
All the information stored on the network becomes available to every participant and there remains no need for one to get confirmations from other officials. This breeds an environment of trust as everyone can simultaneously view what’s up on the network. Since it must be validated by participants by consensus, it becomes extremely difficult, if not absolutely impossible to corrupt the system and overpower it.
All these factors make it extremely easy to trust the blockchain technology and can be easily embraced for most of our business, governance and administration needs.