Blockchain is the not so new technology taking the technology world by storm.
Developed to power virtual currency transactions, such as Bitcoin, the blockchain is making headlines as the software that can enable other applications.
Blockchain is a security system for inline transactions that needs two codes for access – a private key for the user and a public key from a third party wanting to access payment or information with the permission of the user.
Despite the fancy name, a blockchain is essentially a database for recording transactions on a network.
Data is stored in a block and a series of transactions is several blocks linked together with a chain – hence the name blockchain.
How blockchain works
Once access is allowed to one block, all the others are open to view as well.
Blockchains are primarily used to verify online virtual currency transactions, but computer security experts have lifted the bonnet on these currencies and believe the underlying software can be rewritten to enable a host of other applications.
Planned uses at the moment in the UK include running nuclear power stations and operating flood defences.
Experts at consultancy firm Deloitte believe that blockchains also have many more uses.
In a report, the firm says blockchains have a place in banking, insurance and the public sector to manage accounts, streamline processes and to make services more efficient.
Protecting access to digital contents from prying eyes is another application, suggests the firm.
So why is blockchain more secure than other software applications?
“Blockchain is a way for exchanging value over the internet without an intermediary,” says the Deloitte report.
“Blockchain changes the technology landscape because the capabilities of the system are way beyond anything else that is currently available.
“A blockchain can also manage the much vaunted internet of things – all our appliances at home and work that can be digitally controlled.”
Deloitte argues that whatever the fate of Bitcoin, the blockchain will prosper – even if the practical use of the software application takes a decade to emerge.
“Arguments rage about whether Bitcoin is a flash in the pan or not,” said the spokesman. ”Only time will tell, but blockchain will endure and go on to become an unseen part of many people’s daily lives.”