Researchers and technologists alike are talking about how blockchain technology is the next big thing across industries from finance to retail to even healthcare. According to Gartner, their client inquiries on blockchain and related topics have quadrupled since August 2015. This article attempts to provide a short executive summary on what blockchain technology is, how it works, and why has it captured everyones fancy.

Blockchain is a database, or ledger, that allows companies and enterprises to initiate trade digitally without the need for approval from a central authority.

First things first, what is blockchain technology?

Blockchain is the underlying technology behind cryptocurrencies like Bitcoin. Unlike physical currency, digital cash and cryptocurrencies come with a very real problem called Double-Spending. Let me explain what that is. When I email you a picture of my cat, Im sending you a copy and not my original picture. However, when I need to send you money online, as much as I would love to send you a copy of it, its a bad idea if I really do that! With Bitcoin, there was a risk that the holder could just send copies of the same bitcoin token in different transactions, leading to Double-Spending.

Blockchain technology helps counter issues like double spending. The simplest way to think of blockchain is as a large distributed ledger of sorts that stores records of transactions. This ledger is replicated hundreds of times throughout the public network so it is available to everyone. Every time a transaction occurs, it is updated in ALL of these replicated ledgers, so everyone can see it.

Every time a new transaction is initiated, a block is created with the transactions details and broadcast to all the nodes. Every block carries a timestamp, and a reference to the previous block in the chain, to help establish a sequence of events. Once the authenticity of the transaction is established, that block is linked to the previous block, which is linked to the previous block, creating a chain called blockchain. This chain of blocks is replicated across the entire network, and all cryptographically secured which makes it not only challenging, but almost impossible to hack. I say almost impossible because it would take some significant computational power to even attempt something like that.

In the context of security, both transparency of the system and immutability of the data stored on blockchain comes into play. Immutability in computer science refers to something that cannot be changed. Once data has been written to a blockchain, it becomes virtually immutable. This doesnt mean that the data cannot be changed it just means that it would require extreme computational effort and collaboration to change it and then also, it would be very difficult to cloak it.

Evolution into new, alternative implementations

Blockchain technology can really be applied to not just a cyptocurrency like bitcoin, but to any asset that can be stored, distributed or transacted property titles, music, insurance, physical goods and assets, even your data.

This technology has great implications for the financial services industry as well. On implementing a decentralized database or a public registry like blockchain to verify the identities of all parties, no longer will we need to have our transactions stay pending for three days. Settlement would be instantaneous since the transaction and settlement would happen simultaneously once the ledger is updated. There are many such use cases.

Perhaps the biggest use of blockchain technology is in identity management, as described in this insightful TED talk by Don Tapscott.

According to him, as we go through our lives, we leave this trail of digital data crumbs behind us. These are then collected and created into a digital profile of us which is not owned by us! If we were to reclaim our virtual data, and take control over how much and who we give it out to, wouldnt that be a great step towards helping us protect our privacy?

Blockchain technology can fundamentally change how we exchange value and perhaps thats why this has caught everyones fancy. This is still in its nascent stages but definitely a technology that holds vast promise and something to watch for, in the future.

Since blockchain runs on coded software, it allows transactions to be automated, and also avoid duplication.

Currently, most people use a trusted middleman such as a bank to make a transaction. But blockchain allows consumers and suppliers to connect directly, removing the need for a third party.

Using cryptography to keep exchanges secure, blockchain provides a decentralized database, or digital ledger, of transactions that everyone on the network can see. This network is essentially a chain of computers that must all approve an exchange before it can be verified and recorded.

Advances in blockchain technology offer incredible opportunities for innovation by streamlining digital transactions. Recent tech media coverage promises revolutionary developments for many industries, changing the way commerce is transacted and records are kept. But what is at the heart of this technological development? What is blockchain? How is it applicable to so many different uses and industries?

The answers to these questions are explained in ISACAs new research report, Blockchain Fundamentals: An Inside Look at the Technology With the Potential to Impact Everything. This extensive research report provides a deeper technical dive into the use of this technology. Blockchain promises to become a major force for innovation, changing the way you process everything with records. As more businesses realize the value of making this investment, practitioners will need to keep their skills up-to-date.

Blockchain is the data sharing technology behind digital currencies exchanges: blockchain create a digital ledger of transactions which can be shared with networks of computers using advanced cryptography. By sharing the digital ledger, it creates a record that can be authenticated by the community, without the need of a central authority, thereby creating trust in a trustless environment.

According to Biehn, Blockchain-based decentralized systems can be used in cybersecurity, particularly in such areas as hardware and software supply-chain problems. He added that the increased transparency offered by the technology can solve many complex cybersecurity issues.

"If you look at other ways of doing this, if a single database were shared for example, or a traditional leader-election protocol were used, any one of the members can change the data-store at any time. In applications like identity or supply-chain tracking, you obviously don't want a consumer of the data to be able, or someone who has compromised a participant, to change all the information in that ledger."

Hackers can shut down entire networks, tamper with data, lure unwary users into cybertraps, steal and spoof identities, and carry out other devious attacks by leveraging centralized repositories and single points of failure.

The blockchains alternative approach to storing and sharing information provides a way out of this security mess. The same technology that has enabled secure transactions with cryptocurrencies such as Bitcoin and Ethereum could now serve as a tool to prevent cyberattacks and security incidents.

Blockchains can increase security on three fronts: blocking identity theft, preventing data tampering, and stopping Denial of Service attacks.

1. Protecting identities

Public Key Infrastructure (PKI) is a popular form of public key cryptography that secures emails, messaging apps, websites, and other forms of communication. However because most implementations of PKI rely on centralized, trusted third party Certificate Authorities (CA) to issue, revoke, and store key pairs for every participant, hackers can compromise them to spoof user identities and crack encrypted communications.

More recently, tech research company Pomcor published a blueprint for a blockchain-based PKI that doesnt remove central authorities but uses blockchains to store hashes of issued and revoked certificates. This approach gives users a means to verify the authenticity of certificates with a decentralized and transparent source. It also has the side benefit of optimizing network access by performing key and signature verification on local copies of the blockchain.

. Protecting data integrity

We sign documents and files with private keys so that recipients and users can verify the source of the data theyre handling. And then we go to great lengths to prove that those keys havent been tampered with, which is difficult when the key is meant to be secret in the first place.

The blockchain alternative to document signing replaces secrets with transparency, distributing evidence across many blockchain nodes and making it practically impossible to manipulate data without being caught. How do you prove that the San Antonio Spurs were the champions of the 2014 NBA Playoffs? You dont need to because its general knowledge. The same applies to data on a blockchain distributed ledger.

Keyless Signature Structure (KSI), a blockchain project led by data security startup GuardTime, is one group that aims to replace key-based data authentication. KSI stores hashes of original data and files on the blockchain and verifies other copies by running hashing algorithms and comparing the results with what is stored on the blockchain. Any manipulation of the data will be quickly discovered because the original hash exists on millions of nodes.

Protecting critical infrastructure

A massive October DDoS attack taught us all a painful lesson about how easy it has become for hackers to target critical services. By bringing down the single service that provided Domain Name Services (DNS) for major websites, the attackers were able to cut off access to Twitter, Netflix, PayPal, and other services for several hours, yet another manifestation of the failure of centralized infrastructures.

A blockchain approach to storing DNS entries could, according to Coin Centers Peter Van Valkenburgh, improve security by removing the single target that hackers can attack to compromise the entire system.

Blockchain will also remove the network fees associated with DNS reads and will only impose costs on updates and new entries. This has great potential for lifting a great deal of pressure from the physical backbone of the Internet, Saunders said. It also means we can do away with many of the redundancies of the traditional DNS and come up with something much better.

1. What is blockchain? (not to be confused with Bitcoin, blockchain is the technology)

2. Can blockchain be used to improve security?

Please write the answers based on this article in your own words