Blockchain is the word on everybody’s lips, but what is this new technology and how is it used? We’ll give you the rundown on blockchain technology explained in plain English, emerging careers in this field and the skills you need to get ahead.
Blockchain technology explained
Blockchain technology is all about decentralized databases. Picture a Google document which you share amongst your colleagues. Similarly, the digital information held on a blockchain exits as a shared database which is continuously updated.
Blockchain data is linked and secured by means of cryptographic algorithms. These algorithms are based on computational processes which are so difficult that it’s unfeasible that they could be solved by a third party.
What’s great about it?
A major benefit of blockchain technology is that the database isn’t stored in any single location (unlike centralized database systems typically used by organisations or companies). Instead, the database is hosted by millions of computers simultaneously. This means that there isn’t a centralized version for hackers to target and corrupt. The records are also public and easily verifiable.
Blockchain goes hand in hand with cryptocurrencies. Cryptocurrencies use digital encryption techniques to control the creation of monetary units and to verify funds transfers. They’re stored electronically in a blockchain and unlike government-backed currencies like the Australian dollar, their supply isn’t determined by a central bank.
The lowdown on Bitcoin
The most famous cryptocurrency is of course Bitcoin. Bitcoins are created by the process of mining. Mining involves validating users’ transactions along with solving a deliberately complex algorithm as proof or work. The first participant to solve the algorithm gets to place the next block on the blockchain and claim the rewards: newly released bitcoins. These algorithms are so computationally intensive they require specialised hardware with super high-speed processors – not something you can carry out on your home PC!
Bitcoins can be purchased from the hundreds of cryptocurrency exchangers which are currently emerging and stored in a cryptowallet: a software application secured by cryptography. Merchants which accept bitcoin are increasing all the time – Bitcoin can be used to buy just about anything (from selected retailers), including real estate, food, airline tickets and a whole range of bizarre things.
Industries using blockchain technology right now
- Financial transfers & humanitarian relief
Last year, a project run by the UN’s World Food Programme sent Syrian refugees cryptocurrency-based vouchers which could be redeemed at local food providers. The UN is also using blockchain to address human trafficking by storing the digital identities of at-risk children on a blockchain.
Storing the unique serial numbers for pharmaceuticals requires secure databases to ensure the integrity of drugs from manufacturing to consumption. Logistics firm DHL have teamed with professional services provider Accenture to develop a blockchain-based serialization system to keep track of the pharmaceutical life cycle.
- Food Safety
Similarly, the global food supply chain could be benefited by blockchain serialization to track the origin and state of food and prevent contamination. Tech multinational IBM is working with food suppliers such as Nestle and Walmart on the blockchain network.
The World Wildlife Fund is also using blockchain to track the origins of seafood to increase consumer awareness of illegal fisheries.
A startup called Follow My Vote is getting to work using blockchain to provide an unhackable electronic vote-counting system. Blockchains could provide a permanent and public ledger for votes as they’re tallied, which could be an excellent way to prevent voter fraud.
Other companies investing heavily in blockchain right now include IBM, who are working on a blockchain banking solution, Mastercard, Microsoft + Accenture, Google, Dell and Hewlett-Packard.
Computer science skills are essential for blockchain jobs.
What skills do I need to develop blockchain technology?
According to Hackernoon, which reports on the latest trending stories in the tech community, a blockchain engineer needs to be “a hybrid of a software developer, a junior economist, a data geek and an auditor”.
Skills & qualifications for working with blockchain technology:
Computer science: Data analytics, cryptography, software development and programming (object oriented programming, system architecture and test driven development)
Economics: Concepts such as incentivisation, supply and demand, opportunity cost
Soft skills: Versatility and being open to learning as you go, as this is a new and exciting field!
Relevant degrees: Computer Science, Software Engineering, Data Science/Engineering, Economics, Finance & Accounting
RMIT recently released Australia’s first online short course specific to blockchain technology, while Swinburne University now offers a Graduate Certificate/Master of Financial Technologies.
Other resources to check out:
Check out the Blockgeeks crash course in how to become a blockchain developer.
Author: Eliza Brockwell
Eliza is passionate about creating content that encourages diversity of representation in STEM.