Jan 16, 2019

What Is Blockchain Technology?

If you pay attention to tech or financial news, you've probably been hearing about an emerging technology called blockchain. At its very core, it's pretty easy to understand, but the way blockchain works is unusual, so it can sound a bit confusing at first. Learn more about what blockchain technology is and how it could be a doorway to an in-demand specialist career.

Blockchain Is...

a type of database. That's a very reductive definition, but it does help get at the "why" and "what" of blockchain. This technology is designed to store information in a secure, encrypted, tamper-proof manner. Blockchain is actually just one type of distributed ledger technology (DLT), which is a type of decentralized database. This means that information isn't stored in one single location, like a corporate server. In the case of blockchain, information is stored on a linked network of personal computers, hence the "chain" part of the name. Each individual record of information is known as a "block." So, you have a chain of blocks, or blockchain.

One key feature of blockchain technology is that its records are unalterable. You can access information further back in the chain, but you can't change it. Once it's there, it's set in (digital) stone. This makes it a highly reliable source of information, which explains why it's been such a focus for financial applications. Blockchain has mostly been used for cryptocurrencies like Bitcoin, though it has other applications as well. In theory, a landowner in a developing nation could store the deed to her land on a blockchain and be confident that it can't be tampered with by other people, lost in a natural disaster, or otherwise erased from existence the way a paper deed or centralized, unencrypted digital document could. The block containing the record of her deed is contained on an encrypted, distributed chain.

Where It Gets More Complex

This definition really only scratches the surface, and that's part of the reason blockchain seems so complex. Another issue is that the language around this emerging technology is still up for debate. The important thing to know is that no one company owns blockchain technology, and its decentralized, distributed nature means that it's highly accessible to anyone with an Internet connection. The structure of the tech also means that in using blockchain, you help it operate. The information you store becomes part of a chain of relevant information. Even if you lose that information somehow, the links on the chain before and after you will still exist and will contain a record of whatever transaction or information is in the chain.

The Future of Blockchain

As with any promising new technology, blockchain is getting a lot of attention from major corporations and startups alike. Organizations like USAID even see it as a promising way of providing financial and document stability to people in developing nations. This means that you're likely to see the job market in this area expand in the near future, and there are already many jobs with titles like blockchain developer. So if blockchain technology holds any interest for you, it might be a good idea to check out a Udacity nanodegree program in this area. The future of blockchain isn't written in stone at this point, which means you could end up having a hand in shaping what this technology does for the world.