What is blockchain?
06 Feb 2017
Yes
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So what is this new technology everyone’s talking about, and how will it make a difference?

 

​​Credit: Dreamstime/Pablographix

 

​We recently defined the research priorities for our collaborative blockchain project with Innovate Finance, which will use our advanced computing technologies, novel architectures and technical experts to address some of the challenges associated with blockchain technology such as scalability, energy-efficiency and speed.

​What is blockchain?

Blockchain is a technology used to record data in a distributed ledger system. It gained prominence as the technology that underpins Bitcoin currency, built to provide a record of transactions on a visible ledger shared between different parties – working in a similar way to a peer-to-peer file-sharing network.

Once a transaction is recorded, all the parties must agree and validate it before it is accepted, so rather than having one trusted authority, Blockchain is an example of a digital technology enabling a central authorising body. In terms of security, this is useful because once the new piece of information is verified and logged, all parties host it concurrently, so it becomes incredibly difficult to corrupt covertly. In order to change a piece of information or transaction logged on it, you would need to access and change the record on every single distributed host in the network, individually, to circumvent the need for widespread authentication. This makes blockchain much less vulnerable to crimes such as fraud or hacking, as information recorded on it is almost impossible to change.

Where could it be applied?

Blockchain is an intriguing technology for any industry that is looking to reduce the risk of fraud or tampering within a system that records data or deals with transactions - making it particularly applicable to financial and related industries. It has recently become something of a buzzword in the FinTech sector, due to its potential to transform the way we interact with the digital world. Some example applications include secure identity verification, money transfer and even the prevention of music and media piracy. Blockchain has enormous potential as a disruptive digital technology, and some, such as Kevin Kelly, author of The Inevitable, have suggested that it is only a matter of time before we see it replacing single organisations and authorities as the gatekeepers to data with peer-to-peer distributed authorities.

Where can I find out more?

Apart from using a good old-fashioned search engine, Innovate Finance has a series of useful resources on its website. We’ve listed a few here for your convenience:

 

Blockchain in the UK

Demystifying the blockchain

Blockchain in 60 seconds

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