In this lesson,
we're going to discuss the blockchain.
Now, the blockchain is a shared immutable ledger
for recording transactions, tracking assets,
and building trust.
Now, when we talk about the blockchain,
you're probably thinking about cryptocurrencies
because those are some of the most famous examples
out there of using the blockchain.
For example, Bitcoin has been all the rage
for about the last decade, and this was really
the first commercially available type of thing
that was using this blockchain technology.
But when we talk about the blockchain,
we need to really understand the way it works,
and it really works by essentially
creating a long series of information,
with each block containing information inside of it.
That block is inside of the ledger
that we're going to be talking about,
and inside of it, you're going to have
the previous hash for the block before it.
So if I'm looking at block 11 here,
you can see the previous hash is actually
the hash of block 10,
and we also have a timestamp associated with it.
This tells us when the last time this block was modified.
Now inside this blockchain, we also have root transactions.
Under there, we have hashes for each
of the different transactions that have occurred,
and these things all roll up
and you'll see a transaction zero
and transaction one, each with their own hash.
Then we combine these to give us hash one together
and then we combine hash one and hash two, three,
and we put those together to create the transmission route.
Then, all of this just feeds up into that one block
and there are millions and millions
of blocks inside of this blockchain.
Now when we talk about the blockchain,
the other thing we have to think about
is what is known as a public ledger.
Now, the public ledger is a record keeping system
that maintains participants' identities
in a secure and anonymous format.
This also keeps track of the respective
cryptocurrency balances if we're going to be dealing
with cryptocurrencies, and it has a record book
for all of the genuine transactions that have been executed
between different network participants.
So as we start dealing with the blockchain,
everybody is part of this massive peer-to-peer network.
It's going to be decentralized,
and because of that, we use this series of hashes
to make sure that everything is being recorded properly
and that nobody can change it without proper permission
because that way, everything is authenticated
and stored throughout this blockchain.
Now, another application of blockchain technology
is in the realm of digital contracts,
which are also referred to as smart contracts.
Now, smart contracts or digital contracts
are self-executing contracts
where the terms of the agreement or conditions
are written directly into the line of code.
These contracts will automatically execute actions
when certain conditions are met
without the need for intermediaries.
For instance, a smart contract could automatically
release funds to a seller once the buyer confirms
the receipt of their goods.
The decentralized and transparent nature
of these blockchain transactions also ensures
that once a smart contract is deployed,
it cannot be altered, and this makes the agreement
tamper proof and fully trustworthy.
Now with the introduction of platforms like Ethereum,
smart contracts have gained widespread popularity
due to their potential to automate complex processes
and operations from business transactions
all the way out to governance systems.
They not only offer us transparency,
but they also reduce the risk of fraud
and the cost associated
with traditional contractual processes.
In addition to all of that,
every executed contract action
is also recorded on the blockchain,
so there's a clear and indisputable record
of all the transactions that reinforces the concept
of trust inside of our digital dealings.
Now, in addition to talking about cryptocurrencies
with the blockchain, there's also commercial uses
for the blockchain too.
One of the biggest people out there
who really likes to push the blockchain is IBM.
IBM is really focused on getting the blockchain
into use inside of the commercial environment.
And one of the ways they've been doing this
is by using what is called a permissioned blockchain.
Now, a permissioned blockchain is going to be used
for business transactions, and it promotes new levels
of trust and transparency by using immutable public ledgers,
meaning that we know everything about that particular piece
of information that's being stored inside
of this blockchain.
Now, one of the places where we're going to try
to use blockchains is in the supply chain.
This way, we have a fully traceable
and transparent supply chain.
If you think about this from a food perspective,
it would be really nice to know exactly when and where
and how that food was grown,
when and where and how it was picked,
and when and where and how it was shipped,
as well as when and where and how it was processed,
and all the way through that supply chain
until you finally pick up that item at the grocery store.
This way, you know all the information
about that particular food to make sure
it's following the right procedures,
and you have all the information you need
to determine that it's safe.
Also, because it's located inside
the immutable public ledger,
nobody can modify that data,
and we all know exactly where everything has been located
and what has been done to it.
So remember, blockchain technology is not limited
to just the financial sector or cryptocurrencies.
Its applications and potential
span a wide range of industries.
It has a decentralized nature,
and it's combined with the transparency and security
that is provided by the immutable public ledger.
And all of this together can revolutionize
our traditional systems by offering enhanced traceability
and accountability across the blockchain.
From supply chain management to voting systems,
from property transfers to intellectual property protection,
the blockchain stands as a promising solution
to an age old challenge of having trustworthiness
and openness and transparency
in all of our business dealings.
This makes it essential to recognize
its broader implications and how it can reshape industries
by providing this transparency, efficiency, and trust
in all of our transactions and information exchanges.
As the technology continues to evolve
the blockchain will definitely become a cornerstone
of our digital evolution
and it'll impact various sectors in unprecedented ways
as we continue forward using the blockchain.