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Dell Technologies says that 82% of business leaders believe humans and machines will work together in integrated teams within five years. This month, IG attended the Global Blockchain Innovation Summit in London and spoke to a number of blockchain experts including Dell EMC’s chief technology officer (CTO) for EMEA and vice president for innovation, Pilar Santamaria, to discuss why she believes the blockchain will be a key part of this change. She says it will make businesses more agile and improve system processes, adding that the blockchain will add transparency by making it easier for customers to access information and will reduce bureaucracy.
What is the blockchain?
Blockchain technology underpins cryptocurrencies such as bitcoin and ether, and has the potential to revolutionise established industries and practices. Simply put, it is a record of data that is distributed across a network of computers, meaning there is no single point of failure. What makes it unique is that there is no central authority in charge of the blockchain file or the data it contains. Instead, each computer keeps its own copy of the file, and any update requires the approval of a majority of machines in the network, making it almost impossible to hack.
Information in the blockchain is linked together by cryptography, complex mathematics. This means that even the smallest of changes will break the entire chain and be rejected by the network. For these reasons, blockchain technology is extremely reliable and secure. For cryptocurrencies like bitcoin, blockchain is used to record transactions. The blockchain could potentially be used to store any type of data, including documents, photos, computer code or even to build secure systems.
How does it work?
New data is added in blocks, which occur at regular intervals to form a chain. Each block contains a portion of data and hash. A hash is a unique identifier for the block generated using the data contained within it. Each block also contains the hash from the previous block, which is how the chain is formed. These hashes can be used to verify that the data has not been tampered with, as even the smallest changes to data within a block will invalidate its hash and the hashes of all the blocks that follow. However, with copies of the blockchain file stored on computers all over the world, how does the system ensure there is only one version across the network? Unverified data, such as a pending cryptocurrency transaction enters a pool. Computers will select a set of this data from the pool, add it to a new block and attempt to generate a hash in a process known as mining. The difficulty of generating hashes can be adjusted as the network expands and processing power improves to ensure that blocks are mined at a consistent rate.
When a computer has generated a hash for a block, it is transmitted to other computers for verification. The mathematics involved ensured that hashes are difficult to generate but easy to verify. Once a computer has verified the new block, it updates its copy of the blockchain file. It is considered part of the blockchain when a majority of machines have updated their copies of the file. The computer that generated the hash for the new block is then rewarded with new bitcoins for example, which are said to have been mined.