What is blockchain? - the future of our economy and society

Most connect the blockchain technology with cryptocurrency. It can do much more than that. Among other things, hope is that in future it will help prevent tax fraud and cheating in elections. Read here and understand why Blockchain is the future of both our society and the economy

The blockchain technology is most associated with cryptocurrencies, of which the most well-known is Bitcoin. However, the system can also be used in many other industries, and many are working on how to incorporate the technology into their business - or are starting businesses based solely on blockchain technology. For example, banks, companies that offer digital storage, and states may want more secure choices.

The technology thus provides a wealth of applications, which makes it most likely to be extremely important for our society in the future, both in terms of economy, choice, rights, contracts and much more.

Blockchains history

The idea of ​​blockchain is not new at all. It already arose in 1991, when it worked to develop a system that could send documents electronically, so that you could never change the date - and there could never be any doubt about it.

However, the technology was first used in 2008, when the founder of Bitcoin, Satoshi Nakamoto, developed the blockchain system, as we know today. It is therefore a relatively new technology.

How does blockchains work?

A very simple way to explain what a blockchain is based on the name. Blockchains are a chain of blocks, each block containing information that can not be changed. Each block therefore consists of some complicated codes that contain a number of information. There may be transactions of cryptovaluta or the rights to songs.

Once the blocks are formed, they can not be changed. If you perform a transaction with a crypto or you sell the rights to a song registered in a blockchain system, the block where the information was located will not be changed. Instead, a new block will be added to the chain.

When it comes to crypto, it must be approved by others in the network every time a new block is added to the chain. It helps to ensure that it is not possible to cheat with the currency. Even if a false block comes in, it will not be able to live in the chain. When it is discovered that it is false it will be run out of a sidetrack and the chain of blocks before and after the fake block will continue unaffected by it.

DR has made a video, where a 10-year-old explains how blockchain technology works. It helps to provide a good overview for you who are only learning about blockchains.

It is not possible to make infinite blocks

To get a currency to work it is important that you can not only print a lot of banknotes or create a lot of digital devices. If everyone can do that, they devaluate the currency, so it's worth nothing at last. When blockchain is used to secure a currency, it is important that new blocks can not always be created. Then they lose their value.

Therefore, there has been a limitation on how many new blocks can be made. For Bitcoin, only one block can be made every 10 minutes. Each block is made by solving a complicated math problem. It requires the very right software to do it. It is also called cryptomining. It is estimated that the last Bitcoin block will be found in 2150.

The one who solves the math problem gets the Bitcoin block and has thus earned a Bitcoin to solve the problem. To ensure that there are no fake Bitcoin blocks into the system, other miners of Bitcoin must check that the person who has received the block has now also found the right answer to the problem.

The Community can prevent fraud

An important prerequisite for a blockchain to work is that there is a community around it. There is no person or authority that controls it. It is controlled by anyone who wants to. Which makes it virtually impossible to cheat in a blockchain.

For example, an investor tried to exploit a loophole in Ethereum's blockchain to move a large number of Ether over to his account. Ether is another form of cryptovaluta, and by the second most popular after Bitcoins. The reason he could, was that there was an error in the system due to malware by the programmer.

If it had happened to a regular bank, the money would be gone. But the Ethereum Network jointly agreed that the Ether, which the investor had taken, should be made a branch of their blockchain. Your chain of blocks should therefore continue without those who had been taken, which made the stolen Ether worthless.

Blockchain is much more than crypto

Today, blockchains are primarily associated with cryptovaluta, but it can also be used in many other ways. For example, it may be to ensure rights in relation to images and music. By putting an image into a blockchain and deciding who took the picture and thus has the rights to it, there can never be discussion about who owns the image.

A number of companies both in Denmark and abroad have already begun working on how they can use blockchain technology to make their work more safe or simply to create new types of companies.

Businesses have already begun using blockchain technology

One of the companies stemming from blockchain technology is Storj. With them you can rent storage space on another person's computer. For example, if you do not have more storage on your computer than another person has, you can put your files on their computer - without the other person being able to see your files of course. The person who leases space on his computer is paid in Bitcoins, and all information about you, your files and their location is stored in a blockchain, so there is never any doubt as to where they are.

Another example of a company that uses blockchain technology as their foundation is Dynamis. They try to make unemployment insurance using the Ether crypt box. The insurance is based on a peer2peer principle. This means that those who pay for the insurance pay to those who are not at work at the moment. Once all the information is in a blockchain, it becomes completely transparent to all contributors who have contributed how much and how much the individual has been paid.

Blockchains can provide more secure choices

As our election systems become more and more digital, they also become more and more vulnerable to hackers trying to cheat on them. However, this does not mean that we do not have to use modern technology, but that we must be better at ensuring our choices. Blockchains can just be part of the solution.

One of the solutions that are working on getting to work is to use blockchains for the choices. Once a block has been formed, it can not be changed. It helps to ensure that the voices that have been submitted can not be subsequently changed by hackers.

Nor would it be possible for the hackers to add new blocks with more votes to the candidate who they would like to win. If they add a block, it must be approved first, and of course it will not be when it's a fake block.

Danish companies have also accepted the blockchain technology

In 2016, Mærsk, Nordea, Skat and IT University of Copenhagen went together to find out how to use blockchain technology to improve their work. Some of the initiatives they consider are, among other things, whether it can be used to prevent money laundering, auto-customs controls, and make life journals for houses and cars more transparent.

With the high degree of transparency a blockchain gives, where it is impossible to delete a block and thus hiding a transaction that has taken place, it will make it much easier for companies to curb cheating.

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