Everything you need to know about Blockchain Technology Explained

Have you heard about blockchain technology?

I don’t know about you, but recently I’ve seen a lot in the news feed about this new wonder technology in FinTech (finance technology), Blockchain.

But what is blockchain? How are companies using blockchain? I set out on a mission to find out.

Spoiler alert – it’s pretty cool!

So now I’m here to share the fruits of my investigative labors with you. Welcome to Artificially Intelligent Claire’s introduction to blockchain technology explained. As usual, I’ll also talk about artificial intelligence and blockchain.

Who’s artificially intelligent Claire? In case you’re new to the blog, find out all about me here and my mission to make big data and AI concepts accessible to everyone!

This image is not blockchain, but it entertains me – credit: daily_programming_fun Instagram

Before I get started on the specifics of blockchain, I want first to introduce FinTech and cryptocurrency.

What is FinTech?

FinTech (wiki link) is a catch-all term used to describe the various emerging technologies competing with traditional financial services companies. Fintech can come in many different forms including smartphone apps, new types of investment services and cryptocurrency.

What is cryptocurrency?

Now let’s talk a bit about cryptocurrency. The simplest way to think about cryptocurrency is as virtual money. Cryptocurrency is a virtual asset that you can trade for goods or services.

Cryptocurrency has grown significantly since it’s development.

But it hasn’t been without its controversies.

Cryptocurrency transactions are complicated to track. Recently there have been several news stories about how blockchain technology is being used to mask criminal activity.

Probably the most famous type of cryptocurrency is Bitcoin.

Bitcoin launched in 2009. Since then three main types of cryptocurrency have emerged:

• Bitcoin: The first cryptocurrency. Uses shared databases, known as blockchains to facilitate peer to peer transactions
• Altcoin: Similar to Bitcoins but with small differences. There are 1000s of different Altcoins out there.
• Tokens: Different to Bitcoin and Altcoin as it doesn’t use their own blockchain. They are used to purchase items on dApps (a technology used with cryptocurrency).

This description is just a very quick and dirty intro into cryptocurrency. If you want to read more about this article on the bitdegree.org is an excellent overview (link).

Blockchain Technology Explained

Ok, now I think we’re ready to dive into the main topic of this post, blockchain.

So what is blockchain?

Blockchain was developed to be the public record of transactions completed in bitcoins. It is like a bitcoin bank statement.

Each transaction is a different block. They combine over time forming a blockchain.

Each block within the blockchain contains:

• A hash code (known as a cryptohash) that represents the previous block in the chain
• A time stamp
• Transactional data

What are the top benefits of blockchain technology?

The design makes it very difficult to modify or corrupt a blockchain. This security is because of the cryptohash. The cryptohash means that to edit one block, you would need to re-write all of the others.

You can only access the Bitcoin assets using a private key (password). Meaning you would need permission to edit them all from everyone in the chain. As a result, it is as very secure.

The blockchain database is continuously updating. It allows multiple updates simultaneously. Similar to when you have multiple people working on a document in a shared location. Examples include windows SharePoint or Google Docs.

To summarize what blockchain is, it is a record of transactions.

Blockchain is a central database made up of blocks developed in a way that makes it very secure to use.

Want to learn more about blockchain technology? Check out this article for an in-depth beginners guide (link)

5 innovative ways are companies using blockchain

There are many different ways companies are using blockchain technology. If we go back to the discussion on what is blockchain, we defined it as a record of transactions. Think about how many different scenarios there are where you need or use a record of transactions. Now, applying this to the corporate world gives an almost infinite list of ways of companies using blockchain.

Here is a list of 10 of my favorite ways companies are using blockchain split out into five areas.

Healthcare

Anyone who has read my blog before will know how passionate I am about applying technology to benefit healthcare. See both these articles where I reference it – Why I love Machine Learning (link) and Harvesting the remarkable power of AR & VR (link)

Two ways in which companies are using blockchain to improve healthcare:

1. Tracking drugs and prescription medicines: Black market and counterfeit drugs can be a big problem. I don’t need to tell you how serious an issue taking fake medications can be. Enter Farmatrust. Farmatrust (link) is a UK based startup using blockchain to track medicine through the supply chain of pharmaceutical companies. This helps to prevent fraud – pretty cool, eh?
2. Medical records: So as we have discussed blockchain is a very secure, digital record of transactions. What, in that case, could be better for storing personal as medical records? That’s precisely what DHealtNetwork thought (link). Based in Queensland, they are using blockchain to facilitate better communication between doctors. They support them to share medical records which reduce the risk of miss-diagnosis.

Finance

We have already talked about the various types of cryptocurrencies that use blockchain. However, this isn’t the only way companies are using blockchain.

1. Fund management: Tracking transactions can be a bit of a headache for fund managers – bless ‘em. Blockchain offers a real-time way for them to share records of transactions as required.
2. Staff payment: Blockchain and Bitcoin are particularly useful if you need to pay remote employees or contractors can be one way to cut costs. It does this by circumventing fees (these are the words of the companies offering the service. You and I could call it avoiding…)

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Supply Chain

Several companies with logistics needs are starting to see the technology as a way to improve or give visibility to their supply chain. Check out these innovative ways companies are using blockchain technology in their supply chain.

1. Produce tracking: Walmart is giving visibility of where your produce is coming from using blockchain technology. Employees see exactly where the fruits and vegetables grow. I think that’s pretty awesome. See more details here (link)
2. Trucking and tracking: Both UPS and British Airways are using/testing blockchain to help with monitoring of products or data between locations. Blockchain offers them a secure and scale-able mechanism to understand better what is happening between destinations.
3. Resolving Customer issues: FedEx is using it for reverse tracking. What I mean by this is that they are using blockchain data to understand where Customer issues have at the root. This can then help them to be resolved wayyy more quickly. Happy days.

Record keeping

This topic is a bit broad, but I wanted to make sure I had a catch-all group to share these two ways companies are using blockchain that you may not have thought of.

1. Law: With people becoming more comfortable with digital contracts and transactions, law firms are increasingly required to become comfortable with the technology. The understanding of blockchain is critical for them to be able to guide other companies in this world. How do we ensure the use of technology is ethical? Check out my thoughts on things to consider here.
2. Efficient cloud storage: Who doesn’t love efficiency savings? I certainly do. We live in the age of the sharing economy, why not share storage. Got a few GB of storage hanging out free on your laptop? Rent them out using companies like Storj. How do you get paid for this? Why blockchain technology of course!

Power

Perhaps the most innovative ways I have found where companies are using blockchain is the use case of Power Ledger. Power Ledger (link) allows customers to buy and sell excess renewable energy. How cool is that? I love seeing people use new technologies in this kind of way.

How to Link artificial intelligence and blockchain technology?

Before I sign off on this topic, I want to as always, close with how artificial intelligence can work with blockchain technology.

I have given three below which I believe show how artificial intelligence and blockchain can have a mutually beneficial relationship. Like chocolate and cake – yum.

Examples of artificial intelligence and blockchain

1. Blockchain as a data source for AI: The data stored in blockchains is an excellent source for artificial intelligence.In particular, if you are using it to develop machine learning algorithms. Depending on the type of data stored on blockchain will impact what we can learn. But there’s no doubt this could be the start of a beautiful learning relationship between artificial intelligence and blockchain.
2. Blockchain to audit AI: Because blockchain records each transaction as a separate block, we can use it to audit what decisions are being made by AI and why. This auditing process is a very similar concept to how Funds and Supply Chains use it, described above in how companies are using blockchain.
3. AI to increase the efficiency of blockchains: This is the final way I’m going to talk about artificial intelligence and blockchain working together. Rising efficiency can also be called cost saving. A lot of the processes associated with blockchain, such as cryptomining (not covered in this post but here’s a  link) are expensive. One way artificial intelligence can help out blockchain is by identifying efficiency savings in storing data, managing hardware costs, etc., etc., etc.

Ok, that’s it, I’m signing off this topic for now. I have really enjoyed researching and getting to understand blockchain. I hope you have too. It’ll be great to see how this technology develops over the next few years.

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