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In this lesson,

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we're going to discuss the blockchain.

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Now, the blockchain is a shared immutable ledger

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for recording transactions, tracking assets,

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and building trust.

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Now, when we talk about the blockchain,

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you're probably thinking about cryptocurrencies

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because those are some of the most famous examples

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out there of using the blockchain.

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For example, Bitcoin has been all the rage

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for about the last decade, and this was really

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the first commercially available type of thing

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that was using this blockchain technology.

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But when we talk about the blockchain,

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we need to really understand the way it works,

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and it really works by essentially

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creating a long series of information,

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with each block containing information inside of it.

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That block is inside of the ledger

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that we're going to be talking about,

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and inside of it, you're going to have

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the previous hash for the block before it.

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So if I'm looking at block 11 here,

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you can see the previous hash is actually

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the hash of block 10,

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and we also have a timestamp associated with it.

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This tells us when the last time this block was modified.

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Now inside this blockchain, we also have root transactions.

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Under there, we have hashes for each

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of the different transactions that have occurred,

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and these things all roll up

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and you'll see a transaction zero

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and transaction one, each with their own hash.

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Then we combine these to give us hash one together

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and then we combine hash one and hash two, three,

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and we put those together to create the transmission route.

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Then, all of this just feeds up into that one block

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and there are millions and millions

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of blocks inside of this blockchain.

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Now when we talk about the blockchain,

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the other thing we have to think about

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is what is known as a public ledger.

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Now, the public ledger is a record keeping system

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that maintains participants' identities

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in a secure and anonymous format.

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This also keeps track of the respective

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cryptocurrency balances if we're going to be dealing

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with cryptocurrencies, and it has a record book

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for all of the genuine transactions that have been executed

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between different network participants.

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So as we start dealing with the blockchain,

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everybody is part of this massive peer-to-peer network.

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It's going to be decentralized,

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and because of that, we use this series of hashes

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to make sure that everything is being recorded properly

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and that nobody can change it without proper permission

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because that way, everything is authenticated

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and stored throughout this blockchain.

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Now, another application of blockchain technology

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is in the realm of digital contracts,

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which are also referred to as smart contracts.

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Now, smart contracts or digital contracts

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are self-executing contracts

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where the terms of the agreement or conditions

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are written directly into the line of code.

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These contracts will automatically execute actions

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when certain conditions are met

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without the need for intermediaries.

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For instance, a smart contract could automatically

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release funds to a seller once the buyer confirms

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the receipt of their goods.

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The decentralized and transparent nature

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of these blockchain transactions also ensures

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that once a smart contract is deployed,

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it cannot be altered, and this makes the agreement

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tamper proof and fully trustworthy.

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Now with the introduction of platforms like Ethereum,

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smart contracts have gained widespread popularity

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due to their potential to automate complex processes

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and operations from business transactions

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all the way out to governance systems.

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They not only offer us transparency,

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but they also reduce the risk of fraud

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and the cost associated

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with traditional contractual processes.

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In addition to all of that,

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every executed contract action

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is also recorded on the blockchain,

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so there's a clear and indisputable record

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of all the transactions that reinforces the concept

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of trust inside of our digital dealings.

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Now, in addition to talking about cryptocurrencies

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with the blockchain, there's also commercial uses

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for the blockchain too.

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One of the biggest people out there

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who really likes to push the blockchain is IBM.

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IBM is really focused on getting the blockchain

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into use inside of the commercial environment.

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And one of the ways they've been doing this

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is by using what is called a permissioned blockchain.

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Now, a permissioned blockchain is going to be used

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for business transactions, and it promotes new levels

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of trust and transparency by using immutable public ledgers,

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meaning that we know everything about that particular piece

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of information that's being stored inside

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of this blockchain.

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Now, one of the places where we're going to try

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to use blockchains is in the supply chain.

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This way, we have a fully traceable

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and transparent supply chain.

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If you think about this from a food perspective,

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it would be really nice to know exactly when and where

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and how that food was grown,

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when and where and how it was picked,

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and when and where and how it was shipped,

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as well as when and where and how it was processed,

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and all the way through that supply chain

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until you finally pick up that item at the grocery store.

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This way, you know all the information

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about that particular food to make sure

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it's following the right procedures,

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and you have all the information you need

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to determine that it's safe.

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Also, because it's located inside

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the immutable public ledger,

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nobody can modify that data,

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and we all know exactly where everything has been located

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and what has been done to it.

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So remember, blockchain technology is not limited

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to just the financial sector or cryptocurrencies.

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Its applications and potential

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span a wide range of industries.

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It has a decentralized nature,

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and it's combined with the transparency and security

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that is provided by the immutable public ledger.

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And all of this together can revolutionize

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our traditional systems by offering enhanced traceability

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and accountability across the blockchain.

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From supply chain management to voting systems,

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from property transfers to intellectual property protection,

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the blockchain stands as a promising solution

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to an age old challenge of having trustworthiness

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and openness and transparency

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in all of our business dealings.

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This makes it essential to recognize

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its broader implications and how it can reshape industries

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by providing this transparency, efficiency, and trust

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in all of our transactions and information exchanges.

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As the technology continues to evolve

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the blockchain will definitely become a cornerstone

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of our digital evolution

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and it'll impact various sectors in unprecedented ways

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as we continue forward using the blockchain.