What exactly is blockchain? Maybe you’ve heard of blockchain, but you probably still have many questions! What is it? What does it do? How does blockchain connect with the telecom industry?
Blockchain removes the need for third party centralization of data, and allows suppliers and consumers to connect directly. A blockchain is comprised a continuously growing set of data records, stored in blocks. Typically, miners solve hash puzzles in a race to publish the next block in the chain. Miners collect transactions and compile them into the next block to be published in the chain, and in this way provide a decentralized database of transactions that everyone on the network can see.
Each block contains data, a hash, which is similar to fingerprint, and a hash of the previous block. This is what creates the chain and makes the blockchain secure from fabricating records. Blockchains have proof of work which regulates the process of publishing new blocks.
Blockchain was originally used to timestamp digital documents so they cannot be backdated or tampered with. Most recently, blockchain has become a household name because of its use with Bitcoin. Storing transaction records in this way prevent the Bitcoin’s value from being duplicated and sent to more than one recipient. Blockchain technology is so revolutionary because it can work for almost all types of transaction involving value, including money, goods, and property. Blockchain can be used for storing medical records, e-notary, and even filing taxes.
Blockchain’s peer-to-peer network also provides security. When the blockchain is shared with a group of people, if a block is added to the chain all users in the network must approve it and check that the chain has not been tampered with. Once it has been approved, the block is added to the chain.
How does the telecom industry and blockchain connect? Right now, the telecom industry is changing as service providers transition from using proprietary hardware to using virtual software to manage their networks. The decentralization of blockchain could help better secure the privacy of the end user experience. Blockchain could also lower network costs due to efficiency gains.
Of course all new technologies come with growing pains. Identifying the optimal entry point for blockchain into the telecom industry is arguably the biggest challenge right!