The Blockchain Explained

By now, you've probably heard about blockchains

and how they're driving banks, venture capitalists,

and crypto-libertarians into a frenzy.

Maybe you've seen explainer videos with stacks of blocks

or sci-fi spiderwebs overtaking the planet,

but just forget about all that for a second.

The important thing to remember about blockchains

is that they make it harder for digital data to go rogue.

Digital information likes to be free,

just ask the recording industry.

Once a file is created, it can be copied, modified,

and quickly develop a wild social life all its own

and before you know it, you're looking

at a photo of kitties on the moon.

Digital data's libertine tendencies

encourage companies to hoard it.

That's why the simple idea of digital currency

took a long time to figure out.

Blockchains are promising because

they can make data you can trust.

The trick is to bind that data

into a strict framework of rules using cryptography.

A blockchain creates a kind of shared record or database

with each peace of data secured

with its own cryptographic keys.

Only people with the right digital keys can add data to

the blockchain or modify information that's already there.

You can get the upside of the internet, like speed and

transparency, without the downsides, like rogue data.

Digital currencies like Bitcoin

use blockchains to prevent counterfeiting

and because computers belong to many different people

enforce the rules, no one is in charge

and there's no need for a central bank.

Companies can use blockchains to create

a safe space to share data and collaborate with competitors.

That could mean faster and more

transparent financial transactions,

less identity theft, and easier ways

to share your medical records.

Some food companies are even using blockchains

to be more transparent about their supply chains,

which could help avoid outbreaks of foodborne illness.

I'll be honest with you, a lot of

blockchains applications can sound kinda boring.

They're about making accountants happy

by making things a lot more efficient,

but some use cases are more radical.

Digital currencies are being tested

as a way to help people not served

by conventional banks, like refugees.

The gemstone industry is testing a blockchain

to prevent sales of blood diamonds.

Blockchains might even make it possible

to safely allow people to vote over the internet.

So, those are blockchains, digital data

you can actually trust, and remember,

don't worry about the blocks.