When Satoshi Nakamoto published Bitcoin’s whitepaper in 2008, it eventually led to the creation of a new currency and, also and more importantly, to a new way of recording information. Blockchain technology, which underpins Bitcoin and all other cryptocurrencies, at its most basic level is a digital ledger that arranges data in a virtually unbreakable way.
When Nakamoto released the first Bitcoin software in 2009, the blockchain took a block of information, secured it with cryptography, and used a decentralized network of computers to process and record the blocks of information. Because each block is marked by a hash that links to the previous block, any form of tampering is instantly identifiable. Additionally, each block has to be approved before it can be added to the blockchain. The end result is a system where it’s almost impossible for rogue transactions to take place and, if they do, they are easily identifiable.
The changing face of blockchain technology
Since the early days of Bitcoin and the blockchain, the technology has evolved. Because the software was always intended to be open source, cryptographers and programmers have been working to refine blockchain for the best part of a decade. In fact, according to Deloitte’s research, GitHub has 68 million blockchain-related projects in progress.
With 24 GitHub forum members contributing the evolution of the blockchain, the digital ledger system is now more secure than it once was. Through a series of forks (where a cryptocurrency splits into two forms: the original and a new one), we now have cryptocurrencies that can be processed more efficiently, more securely, and more anonymously.
For example, when Bitcoin forked in 2017 and Bitcoin Cash was created, the latter introduced something known as segregated witnesses, otherwise known as SegWit2x. The segregated witnesses basically offer another form of verification that removes the need for signature data. In simple terms, this means a block of data can be smaller and, therefore, it can be processed faster.
Although Bitcoin Cash is still in its infancy, it stands as an example of blockchain technology’s evolution and, moreover, the reason more industries are now turning to crypto technology. Already, blockchains and Bitcoin are being used to make online payments more secure.
An example of this is the online casino industry. Online betting sites are extremely progressive when it comes to new technology. At LeoVegas, the average customer can not only access mobile gaming options and random number generators but also live streams. Known technically as live dealer tables, these LeoVegas games, such as roulette and blackjack, combine RFID chips and webcams to create a more immersive experience. Thanks to this progressive attitude, online betting sites are now starting to accept Bitcoin payments. Understanding their customers want security, efficiency, and anonymity, operators are starting to explore the use of Bitcoin not only as a payment option but an in-game currency. Not only that, but smart contracts (another product of the blockchain’s evolution) are starting to replace random number generators.
Demand and diversification will keep blockchain alive
In fact, blockchain is creeping into a diverse selection of industries. Swiss banking firm UBS opened a blockchain research lab in London back in 2015. Wanting to explore how blockchain could be used to improve transactions, the company has since published a whitepaper that details potential innovations such as “quality checks.” By using a blockchain-based system, UBS believes banks can cross-reference their data with other banks to reduce instances of fraud.
The medical profession is also experimenting with blockchain. A study by IBM found that 56% of healthcare executives surveyed were looking to utilize digital ledgers by 2020. The main aim is the create a central database for health records that doctors can access at any time and from anywhere. By storing medical information in the same way as Bitcoin transactions are recorded, this information would not only be more accessible, but almost impervious to security breaches and any attempts to amend it.
As the desire to implement blockchain technology increases, the underlying technology will continue to evolve. In less than a decade we’ve already seen hundreds of cryptocurrencies join Bitcoin as an alternative payment method. On top of this, the digital ledgers that underpin these financial tools are now being seen in new lights. Whether it’s gaming or medical records, the demand for blockchain is gathering pace. In fact, for many, the most valuable contribution Bitcoin has made to the world is that it has shown how effective blockchains can be.
Learn about other ways blockchain is being used in The Blockchain Solution.