"Distributed ledger" transaction technology, demystified
From Vice to the Financial Times, blockchain – the “distributed ledger” technology that underpins the digital currency bitcoin – is being talked about as the future of cybersecurity. One of its defining features, that it is decentralized, is what makes blockchain so safe and potentially transformational.
Used mostly for financial transactions, blockchain could be applied to any task that keeps records. Votes could be tallied or company shares stored and traded on a blockchain network. Personal identities and land titles could also be treated as blocks of data to be recorded, protected and verified.
“The notion of shared public ledgers may not sound revolutionary or sexy. Neither did double-entry book-keeping,” said The Economist in 2015.
Blockchain’s transparency is considered one of its greatest strengths – a feature not often associated with security. Take political elections, for example. With blockchain, every voter would be able to track their vote and check that it had been awarded to the correct candidate. Each vote would have to be verified by a majority of the network, greatly reducing the risk of it being excluded or counted twice. And even though the ballots cast would be visible to everyone on the network, encryption would ensure they remained anonymous.
There is, of course, no guarantee that blockchain is perfectly secure. But at a time when trust in public and private institutions is waning, blockchain challenges the idea that you need to trust those with whom you do business. Blockchain is so secure and transparent, some believe, you can simply trust the system instead.