Blockchain technology has been around for a good ten years, but it is only recently that business and government have begun to realize its potential beyond a digitized ledger for cryptocurrency.
Blockchain was invented back in 2008 by Satoshi Nakamoto to serve as the public transaction ledger for the cryptocurrency known as bitcoin. That work was built on the 1991 efforts of Stuart Haber and W. Scott Stornetta who worked on a cryptographically secured chain of records, called blocks.
The main attraction of blockchain is its security. Once a transaction has been recorded and verified, it cannot be altered. All parties to the transaction, as well as a virtual host of global third parties, keep a copy of the blockchain (in other words, the ledger). With so many copies, it is, for all practical purposes, impossible to hack the ledger and alter transactions.
There are currently three types of blockchain.
- Public blockchain: anyone can have access.
- Private blockchain: permission is required for access.
- Consortium blockchain: membership is restricted to a select group of companies.
Recently, blockchain has been called the most advanced distributed and immutable ledger: a game-changing technology. But what can blockchain do in the real world? Quite a lot, according to some experts who claim that blockchain is the perfect solution for any transactions that require personal identification, such as data sharing, voting, tracking prescription drugs, wills or inheritances, medical record keeping, real estate and auto title transfers, and copyright and royalty protection.
It goes without saying (but we’ll say it anyway) that not all experts are on board. Some have even referred to blockchain as a “crappy” technology and a bad vision for the future. These naysayers have pointed out that blockchain systems do not magically make the data in them accurate or the people entering the data trustworthy; they merely tell you whether the data has been tampered with. Far from being trustworthy, blockchains turn out to be the least trustworthy systems, say these critics. One example given is the voting system in a third world country. The blockchain may keep the voting records secure, but it doesn’t stop a corrupt government from allocating a few extra million blockchain addresses to its supporters.
Even the blockchain’s vaunted security is questionable. To date, three major bitcoin exchanges have been hacked.
Who’s right about blockchain technology? Hard to say at this point. For IT professionals, it might be good idea to learn the technology, but don’t put all your arrows into that quiver.