Bitcoin is the blockchain, which creates digitized blocks of transactions without the need for centralized control. A blockchain has three key parts: a computer network, a network protocol, and a consensus mechanism. Each computer in the network records a copy of the ledger and any changes made must pass an algorithm check to ensure the proposed change appears valid. Once approved, the new block is added to the chain of data. Although originally developed for a public network, companies in several industries are developing their own internal blockchains for private use. Why? Well, for one thing, having a blockchain eliminates the need for a third party transactions clearinghouse, saving both time and money.
For another thing, it increases the accountability and security of the network, as all participants are known and trusted. However, the newness of the technology brings its own challenges as everyone tries to figure out the appropriate applications, anticipate regulation, and establish protocols and boundaries. According to Fortune, about 40 of the top financial companies in the world are currently experimenting with blockchain, with more expected to get on board in the next few years. In tech, IBM is investing both at home and abroad, with a large division based in North Carolina as well as partnerships with startups in Singapore’s shipping industry. You might be surprised at some of the companies leading the way in this technology.
For example, in 2016 Disney developed its own innovative, open-source blockchain platform called Dragonchain, showing that it’s not just tech and finance with an interest. Healthcare is another industry that could benefit once regulatory restrictions are worked out. Healthcare systems handle the most private data about individuals and blockchain can help ensure that patient data is accurate, up-to-date, and secure. So what’s the connection between blockchain and big data?
Well, it has the potential to enable better data management, particularly in sensitive industries like healthcare, as well as improving data quality by reducing human error in making changes. It could also add security to Internet of Things devices, an area in which many experts are raising red flags especially after a botnet of compromised Internet of Things devices was used in a DDoS attack that brought down several major websites in October 2016. The challenge here is scalability as the ledger grows over time. Blockchain isn’t just about pure big data.