HR Jetpack

What is a Blockchain

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Lesson:

What is a Blockchain

  • Course: Blockchain for HR
  • Module: Setting the Foundation
  • Lesson Type: Video
  • Lesson Duration: 3:27

Lesson Content

If you go to Google and ask the question, “What is a Blockchain?”, you are going to get a series of really complicated answers involving code and cryptography.

On one level, that speaks to the level of security and sophistication that is at play here, but it also distracts from a really elegant simplicity that Blockchain technology has going in its favor.

The idea stems from the desire to have a public ledger. That word, ledger, is one that I will come back to throughout the course. For those of you HR pros who wear the “finance hat” in your organizations, you’re probably pretty familiar with your record keeping books. For those of you who aren’t familiar with a “ledger”, think of it like a spreadsheet or whatever kind of bookkeeping mechanism that you are comfortable with.

Blockchains of all kinds use “ledger” as a core definition for their architecture because they are a digital accounting log. It is also common for the phrase “distributed ledger” to be used as an alternative to “Blockchain” as a means of simplifying this technology for the general public.

Regardless of what we call the technology, these are built around a shared architecture. Each block is a transaction or series of transactions in the log. And the “chain” refers to the ongoing collection of blocks over time as they are added to the ledger.

The original idea was that the ledger should be public, transparent, and decentralized. So let’s take a minute to break down why those three elements were deemed to be so vital to the early success of cryptocurrencies and Blockchain technology overall.

First, what is meant by Public & Transparent? It helps for the public to have confidence in the system, since anyone has the ability to confirm the passage of data across that ledger.

The data is still encrypted, so just because you can see that a transaction took place doesn’t mean that you can see all of the contents of the transaction or even who those parties were.

However, in the case of something like Bitcoin or a currency, the public can monitor the currency overall to know that all of the money is adding up and nothing is going missing or being syphoned off. Compared to a private system, you would have to take a private person or company’s word that their system contained the data that they claimed it did.

Next, what is meant by Decentralized? By distributing the ledger across the internet, any time that a new block was added to the chain, it would need to be verified by all other networked nodes. This design makes it very resistant to tampering or attacks.

A single server or “node” operated by a single entity represents a single point of failure. If that one operator is attacked, suffers a power failure, or a simple technical error, then the entire system could go down.

A decentralized network, operated by many unconnected entities which do not depend upon one another is the most secure. Even if one of them is attacked, the other nodes will not accept the changes offered by the poisoned node since it does not match the records that the other nodes are attempting to sync. They will ignore that bad data and continue on.

The very first Blockchain was described in a white paper published on the internet by a mysterious figure known as Satoshi Nakamoto in 2008, and was implemented in 2009 as “Bitcoin”.

Since then, thousands of different Blockchains have been created as variants of that original technical design to achieve a wide range of goals. Next, we will look more closely at how the world’s economy is transforming around Blockchain-based currency as Bitcoin and other digital tokens have sprouted up over the past few years. Consider how this could impact your workplace and your HR department.

Michael Wilson

Instructor:

Michael Wilson

Michael Wilson works with small businesses to build and protect their brands online. He is an IT Generalist whose primary services include: Web Design & Development, Cybersecurity Consulting & Training,...

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