FREMONT, CA – Blockchain is one of the most important developments of the twenty-first century to revolutionize the digital world. From the rise of cryptocurrency to the widespread of distributed ledger technology, blockchain has transformed human understanding of digital identity. It has also enhanced and streamlined the processes of industries such as pharmaceutical, medical, supply chain, postal services, communication, transaction services, and many more by facilitating the creation of an unchangeable record of property rights registration.
Blockchain technology has changed the traditional approaches to storage and management. Instead of storing crucial data in a centralized database, blockchain enables it to be stored in multiple copies in distributed ledgers hosted by thousands of node systems. Changes to the ledger can be made only through a cryptographic process known as mining. When the ledger copies do not agree with each other, the software algorithms automatically revert the changes.
Since blockchain utilizes open-source software, it is not controlled by a single entity, but rather by many independent node systems. It prevents one central authority from exploiting the users. Each node contains all the data in the ledger copy, and the data is openly accessible to anyone. If a large group agrees to undertake a change in the data, it is possible for them to instigate a fork by transacting their ledger copies in a new alliance using altered blockchain software.
However, blockchain is a common-pool resource without specific property rights and is ultimately governed by self-organizing communities. The network control is distributed among blockchain stakeholders and system creators. Consequently, blockchain users possess very little control over the blockchain network. Those who get significant benefits from the blockchain networks often invest more in it. In return, they are granted further control over the system, which enables them to proportion added benefits to themselves.
Also, the proof-of-work approach of bitcoin in lodging transactions can lead to corporate governance of the system. Manufacturers making specialized computer equipment designed to solve the cryptographic puzzles in the blockchain network might reap most benefits from the approach. Miners seeking to increase their incentives will invest in robust and economical equipment. It will enable the manufacturers to sell and operate the mining pools, thus gaining disproportionate governance over the blockchain networks.