The world’s first easy-to-understand explanation of Blockchain.
Most people agree we do not need to know how a television works to enjoy using one. This is true of many existing and emerging technologies. Most of us happily drive cars, use mobile phones and send emails without knowing how they work. With this in mind, here is a tech-free user guide to the Blockchain – the technology infrastructure behind bitcoin, and many other emerging platforms.
What does the Blockchain do?
The Blockchain is software that stores and transfers value or data across the internet.
What can I store and transfer using the Blockchain?
To use the Blockchain, you will need to set up an account or address (a virtual wallet). At this time, the most popular use for the Blockchain is to make micro-payments with virtual currencies. For example, you can buy bitcoin with real money and then spend it on the internet using the Blockchain.
Authorising a payment using the Blockchain is similar to using a credit card to buy something online. Instead of a 16-digit credit card number, you provide the vendor with a unique string of numbers and letters generated for each transaction. With this unique identifier, the Blockchain can verify and authenticate the transaction.
Can I use the Blockchain to transfer real money?
Not yet. Some companies are using the Blockchain to make international financial transfers, but most of these transactions are enabled by bitcoin or other digital currencies. Exchanging real money for bitcoin incurs fees for the sender, but the benefit is speed, security and convenience.
How is transferring value or virtual currency on the Blockchain different from transferring money from my bank account?
Depending on the amount and the destination, when you transfer money from your bank account, your bank will limit the amount you can transfer. Most banks impose daily limits for all transactions. When you use virtual money on the Blockchain, there are no limits.
When you transfer value or currency from your bank account to an account with a different bank or other financial institution, the transfer can take days. When you use the Blockchain, the transfer is immediate. If a transfer from your bank account puts your account into debit, your bank will charge you a fee. The Blockchain will not allow a transfer in excess of your balance and so your virtual wallet will never be in debit.
How is storing value using the Blockchain different from keeping my money in a bank account?
Bank accounts and credit cards are vulnerable to attack from fraudsters and hackers. The Blockchain is a more secure way to store and transfer funds, particularly if you keep a modest value in your virtual wallet. Hacking the Blockchain is difficult, time-consuming and expensive. No one breaks into Fort Knox for just $500. Of course, value stored on the Blockchain will not earn you interest or improve your credit rating; and the Blockchain will not lend you money to buy a house or car. The Blockchain does not replace your bank, but very soon banks will be using the Blockchain too.
How is transferring data using the Blockchain different to attaching a file to an email?
Unlike emails with attachments, the Blockchain enables the immediate transfer of data no matter how big the file. Also, there is less danger of spam or viruses and no need for firewalls or junk folders.
How is storing data using the Blockchain different to storing my files on my computer?
If you lose or break your computer or if it is attacked by a hacker or virus, you could lose that data. The Blockchain resides in the cloud. Like any web-based storage, you just need your username and password to access your data from anywhere anytime.
What else can I use the Blockchain for?
Very soon the Blockchain will be used for online transactions. It will enable smart contracts, crowdfunding and auctions. It will verify the provenance of artworks and diamonds; transfer title to real estate and other assets; and store information about people, products and property. Apps for music distribution, sports betting and a new type of financial auditing are also being tested.
Why is the Blockchain described as “riskless”?
The Blockchain verifies and authenticates both ends of each transaction. It will not release a purchaser’s funds until it has checked that the vendor will deliver as promised.
Is the Blockchain safe?
Standards and regulations are needed so that the technology can be readily used across different organisations, industries and jurisdictions. Blockchains can be private (like an email) or public (like Facebook), so users need to know which type is being operated before joining a new Blockchain.
- Storj Labs Raises $3 Million in Seed Funding - February 26, 2017
- Northern Trust And IBM Pioneer Use Of Blockchain Technology To Help Transform Private Equity Administration - February 26, 2017
- 0x – An Open Protocol for Decentralized Exchange on the Ethereum Blockchain - February 26, 2017
- Global Blockchain Project FERMAT Announces Significant Alpha Release for the “Internet of People” - February 26, 2017
- Blockchain Startup Peerplays Raises $4m Before ICO Even Kicks Off - February 26, 2017
- Numerai Launches Cryptocurrency and New Hedge Fund Built By Data Scientist Network - February 26, 2017
- Disrupt the VC Industry? Brock Pierce and Blockchain Capital to Launch Own Cryptocurrency and ICO - February 26, 2017
- SoftBank, Sprint and TBCASoft Partner in Blockchain Technology for Telecom Carriers - February 25, 2017
- Lisk Introduces New Blockchain Technology Update - February 25, 2017
- Dash Partners with BlockPay to Enable Point of Sale Purchases at Brick and Mortar Stores - February 25, 2017
- Blockchain Interaction Unit (BIU) – No Internet, No Mobile Phone, No Computer. No Problem. - February 25, 2017
- Blockchain Banking Consortium R3 Gets Into Semantic Tornado Over Blockchain – Bitcoiners Jeer from Sidelines - February 25, 2017
- IOHK and University of Edinburgh Establish Blockchain Technology Laboratory - February 24, 2017
- Liberland to Launch Online Startup Contest to Kick Off Smart Nation - February 23, 2017
- Blockchain Intelligence Group Launches QLUE Version Codename Deep Cove - February 23, 2017
- Lykke Crowdfunding – One -year Lykke Forward Offering - February 22, 2017
- Daimler AG Joins Hyperledger Blockchain Consortium as Premier Member - February 21, 2017
- Voatz and Clear Ballot to Explore Blockchain Technology for Remote Voting - February 20, 2017
- New Blockchain Smart Contract Token Developed By GameCredits - February 20, 2017
- Blockchain Could Be a New Operating System for the Planet Says Jeremy Wilson, Vice Chairman of Barclays Corporate Banking - February 20, 2017
- JAAK and the Guardian Initiative Announce MΞTA: A Blockchain Pilot for The Media & Entertainment Industry - February 18, 2017
- The StabL Project – Hadrien Charlanes Plans Stable Tokens and Derivative Products For Ethereum Blockchain - February 17, 2017
- Blockchain Energy Trading Trials Kickoff with Canada’s BTL Group and Austria’s Wien Energie - February 16, 2017
- Smart Dubai Office (SDO) and 1776 Launch Blockchain Challenge - February 16, 2017
- BOScoin, a New Cryptocurrency, Introduces “Trust Contracts” to Overcome the Shortcomings of Ethereum Smart Contracts - February 16, 2017
- European Commission Working on Blockchain – Plans Actively Seeking Pilot Partners - February 16, 2017
- Canadian Blockchain Company SecureKey Awarded U.S. Department of Homeland Security Grant - February 16, 2017
- Microsoft and KPMG Cut Deal and Kickoff Blockchain Nodes in Frankfurt and Singapore - February 16, 2017
- Global Blockchain Project FERMAT Announces Significant Alpha Release for the “Internet of People” - February 16, 2017
- Russian Blockchain Startup Exscudo Aims to Bridge Traditional Finances And The Cryptocurrency Market - February 15, 2017
- Active Year Ahead for Blockchain Solutions in Financial Services, says Corporate Insight - February 14, 2017
- BlockApps and Red Hat Cut Deal to Deliver Hybrid Cloud Solution for Blockchain Applications in the Enterprise - February 14, 2017
- Hyperledger Blockchain Turns One – Director Brian Behlendorf Updates - February 14, 2017
- The State Bank of India Initiates National Blockchain Bank Consortium - February 14, 2017
- The National Bank of Abu Dhabi (NBAD) Introduces Real-Time Cross-Border Blockchain Payments - February 14, 2017
- China Turning Hard to Blockchain – Focus on Fraud Reduction - February 13, 2017
- U.S. Department of Health and Human Services to Kick Off Blockchain in Heathcare Code-A-Thon - February 13, 2017
- Hexayurt Capital presents the Internet of Agreements at the World Government Summit - February 13, 2017
- EquiChain – Blockchain for Emerging Markets Post-Trade - February 13, 2017
- UK Government Approves Tramonex Labs to Issue Currency on Blockchain - February 12, 2017
- US Congress Buckles Down With Blockchain – Launch Congressional Blockchain Caucus - February 11, 2017
- Nick Szabo: Some Private Blockchains Qualify as Bona Fide Blockchains - February 10, 2017
- Bitfury Group and Government of Georgia Expand Blockchain Land Titling Project - February 10, 2017
- Expanse Project Announces Launch of the Expanse Bond System (EBS) - February 10, 2017
- WISeKey to Establish IoT Blockchain Center of Excellence in New York - February 10, 2017
- Blockchain Startup Coinfirm Gets $700k Growth Equity Via VC Funding - February 10, 2017
- Blockchain Health Startup Hashed Health Raises Nearly $2 Million in Initial Funding Round - February 10, 2017
- IBM Kicks Off Blockchain Initiative with Dubai Government - February 10, 2017
- Blockchain Pioneer Medici Ventures Invests in Factom, Inc. - February 7, 2017
- Canadian Blockchain Startup Equibit Raises Quarter Million Dollars in Day One of Initial Coin Offering (ICO) - February 5, 2017