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.
- Zug, Switzerland, To Pilot Blockchain-Based Voting Pilot - June 30, 2018
- UC Berkeley Opens New Blockchain Lab – Steve Chen Appointed to Co-Lead Newly Formed Berkeley Blockchain Lab - December 10, 2017
- Peter Vessenes Announces Deluge Network To Support a Safe and Direct Way to Contribute Bitcoin Directly to ICOs - December 5, 2017
- EXMO Launches Token Sale with Blockstarter’s ICO Solution - December 5, 2017
- AdHive, A Blockchain-Based Native Advertising Platform, Engages with WINGS DAO Platform - December 5, 2017
- Perkins Coie Adds SEC Attorney in San Francisco with Fintech and Blockchain Experience - December 5, 2017
- Cryptocurrency Monero Announces Breakthrough Online Shopping Initiative Featuring Top Global Artists’ Music and Merchandise - December 5, 2017
- Bitcoin for a ‘bit’ of Caribbean paradise - December 5, 2017
- With the Launch of SunCoin, Solar Bankers Takes On the World’s Energy Giants - December 4, 2017
- Blockchain News Is Merging With Token Report - November 30, 2017
- Mira launches Pre-ICO for Mira – an Easy and Convenient Way to Buy, Store and Send Cryptocurrency - November 23, 2017
- Dash and KuvaCash Partner to Fight Inflation in Zimbabwe with Cryptocurrency - November 22, 2017
- INS Ecosystem Partners with Ambrosus to Overhaul the Grocery Supply Chain - November 22, 2017
- Global Debt Registry Unveils Collateral Pledge Blockchain Proof of Concept - November 22, 2017
- Ripple Appoints Former New York State Superintendent of Financial Services Benjamin Lawsky to Its Board and Ron Will as CFO - November 22, 2017
- Advised by the Co-Founders of YouTube and Twitch, Theta Announces a Blockchain-based Video Delivery Network - November 22, 2017
- Modex adds top advisor from Google ahead of ICO - November 22, 2017
- Decentralized Ad Exchange AdEx Partners with INK to Handle the World’s First Blockchain-based Ad Auction - November 22, 2017
- Zilliqa Lowers Funding Cap Despite Heavy Demand from Investors - November 22, 2017
- Health Startup Etheal Combines Blockchain Technology with Micro-Incentives to Build a Peer-Reviewed Global List of Health Professionals - November 22, 2017
- Bitquence Rebrands as Ethos.io, Charting a Course to Unlock Crypto and the Future of Investment for the Masses - November 22, 2017
- Eidoo Introduces User Friendly ICO Engine – Allowing Crypto Startups To Launch And Manage Their Own ICOs For Fundraising On The Blockchain - November 22, 2017
- Simdaq Launches Social Platform for Democratisation and Development of Cryptocurrency Trading - November 22, 2017
- Gameflip Shatters FLIP Pre-Sale Goals, Sets Sights on December 4, 2017 ICO - November 22, 2017
- Golden Alliance Gold Mining Launches Token Sale - November 22, 2017
- Genaro and Storj Labs Announce Collaboration and Product Integration - November 22, 2017
- Metal (MTL) Now Available on the Chinese Cryptocurrency Exchange - November 22, 2017
- Mark.space & Jaguar Land Rover Announce Cooperation - November 22, 2017
- Exscudo – EON Testnet Was Successfully Updated - November 22, 2017
- Valorem Foundation Launches All-new Cryptocurrency Platform - November 22, 2017
- WAX Partners with Xsolla to Offer Its Platform to More Than 2,000 Video Games - November 22, 2017
- Brave expands Basic Attention Token platform to YouTube - November 22, 2017
- Narrative Launches Blockchain Based Social Network That Puts Revenue In Your Pocket, Not Mark Zuckerberg’s - November 22, 2017
- Gladius Uses Blockchain and Spare Bandwidth to Revolutionize Cyber Security - November 22, 2017
- Indorse Announces Partnership with App Store Cryptocurrency, AppCoins, ahead of MVP Launch - November 22, 2017
- Secutix And The Paléo Festival Nyon Announce The Success Of Their Blockchain Pilot Project - November 22, 2017
- ING launches major addition to blockchain technology: Zero-Knowledge Range Proof solution - November 22, 2017
- Cofound.it Announces Teams Participating in Upcoming Live Crowdsale Event - November 22, 2017
- PUBLIQ goes public: The blockchain and AI company that fights fake news announces the start of its Initial Token Offering - November 22, 2017
- Blockchain for Business SophiaTX Reveals New Details of Platform; Confirms Date for Token Generation Event - November 22, 2017
- BCShop.io Launches Partner Program - November 22, 2017
- World’s First Social Entrepreneurship Platform Moms Avenue Challenges Etsy by Gearing Up With Blockchain - November 21, 2017
- WAX Partners with Xsolla to Offer Its Platform to More Than 2,000 Video Games - November 20, 2017
- Pundi X integrates NEM blockchain to Bring Cryptocurrency Payments Into Retail Stores - November 20, 2017
- Fujitsu Develops Security Technology to Safely Connect Blockchains - November 20, 2017
- Jibrel Network Announces a Highly Successful Pre-sale Round - November 20, 2017
- KRAFTWERK on Blockchain - November 20, 2017
- MintHealth: Empowering Patients to Take Control of their Health and Data via Blockchain Technology - November 20, 2017
- IBM Completes PoC Of Blockchain-based Shared KYC With Deutsche Bank, HSBC, MUFG And Cargill, IBM Treasuries - November 20, 2017
- LetsEnhance.io to process images on Neuromation Platform - November 20, 2017