As more people start learning about the “blockchain” due to Bitcoin, its roots and applications go deeper.
Blockchain is a technology in itself. It strengthens Bitcoin, and in fact is the reason why * so * new ICOs are hitting the market – creating an “ICO” is ridiculously easy (there are no barriers to entry).
The purpose of the system is to create a decentralized database – which means that a computer network (usually managed by individual people) can operate, rather than relying on people like Google or Microsoft to store data. in the same way as a larger company.
To understand the consequences of this (and thus where technology will take the industry), you need to look at how the system works at a basic level.
Created in 2008 (1 year before Bitcoin), it is an open source software solution. This means that the source code can be edited and downloaded by anyone. However, it should be noted that the central “repository” can only be changed by certain individuals (so the “development” of the code is generally not free for everyone).
The system works with something known as a merkle tree – a type of data graph created to provide a version of data to computer systems.
Merkle trees have been used to make a big impact in a number of other systems; especially “GIT” (source code management program). Without much technicality, it basically stores a “version” of some data. This version is numbered and can therefore be downloaded when the user wants to recall the old version. In the case of software development, this means that many source code can be updated on more than one system.
The way it works – is to store a large “document” along with a central data set updates – is basically something that Bitcoin and all other “crypto” systems love. The term “crypto” simply means “cryptographic”, which is a technical term for “encryption”.
Regardless of the main work, the real benefit of a broader “chain” approach is almost the “paradigm” it gives to the industry.
There is an idea called “Industry 4.0” that has been floating for decades. The idea, often compared to the Internet of Things, is that a new layer of “autonomous” machinery can be applied to create more efficient production, distribution and delivery methods for businesses and consumers. Although it was often likened to it, it was never accepted.
Many experts are now looking at technology to facilitate this change. The reason is that the interesting thing about “crypto”, especially as people like Ethereum have proven, is that the various systems built on it can actually be programmed to work with a single layer of logic.
This logic is really what IoT / Industry 4.0 has missed so far, and why do so many look to the “blockchain” (or equivalent) to provide a base-level standard for new ideas to move forward? This standard will allow companies to create “decentralized” applications that enhance smart machines to create more flexible and efficient production processes.