Blockchains

What are blockchains?

Blockchain technology integrates networks with databases resulting in a peer-to-peer based distributed database spread across multiple entities, with no single owner or single point of failure. Blockchain technology removes the need for trust because immediate synchronisation (“near real time”) across entities means no single trusted third party is needed to guarantee that the transaction occurs. Blockchain technology also guarantees a permanent record because no data is ever deleted only appended. Blockchain technology makes extensive use of cryptography in order to prove identity and authenticity using digital signatures. Blockchain technologies were first developed as part of the Bitcoin cryptocurrency but are now believed to offer many other capabilities. The recent development of Ethereum (and similar initiatives like Hyperledger) envisage the blockchain as a distributed computer capable of running (relatively simple) programs called “smart contracts”. Key predictions include the opportunity to develop “distributed autonomous organisations” (DAOs), run by software and entirely outside of the control of any individual or institution, and effectively impossible to “stop”. Putting these characteristics together has made many researchers, entrepreneurs and pundits predict that the technology will revolutionise a large number of different commercial sectors from finance and insurance, through health records and tax collection, to supply chains, the music industry as well as the gambling industry.