Blockchain: it’s the future?

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It’s the underlying technology that made Bitcoin possible. But what is it and why are people talking about it?

No need for government

A blockchain is a digital decentralised ledger, which records all “cryptocoin” transactions chronologically, (usually) publicly, immutably and is cryptographically secure. This means that no token can be spent twice and there is no central authority organising and auditing the system. This second feature is key, as it could remove the need for government intervention in economic activity.

There are now over 800 cryptocoins

Bitcoin was the first cryptocoin to use blockchain technology but there are now over 800, with more launching daily. While they all make use of a blockchain, there are many points of differentiation, with Ethereum supporting smart contracts, IOTA enabling micro-transactions and Dash using proof-of-service to confirm transactions, rather than proof-of-work (mining).

New technologies being incorporated

Developers are actively working on improving blockchain technology all the time, across multiple platforms. On Bitcoin, SegWit has recently been implemented to make way for the Lightning Network, which will enable instant and much cheaper transactions to take place on a sidechain. Ethereum has a roadmap planned for multiple upgrades, with one of the most significant being an end to computer-intensive mining, by switching to a proof-of-stake mechanism.

Government support?

Gibraltar and the Isle of Man have welcomed cryptocurrency, and the two play host to many blockchain businesses.

But recently, there have been knockbacks: China, for instance, has sought to ban – or at least regulate – the activity.

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