Five Main Principles Behind Blockchain Technology Part 6

To and From on blockchain networks.

 

Transactions on blockchain networks

After a user sends money on a blockchain network such as Bitcoin to a “to” address, without a “from” address, the transaction instantly becomes visible to the entire network.

The next step for a transaction is to become a part of the blockchain. Inclusion of a transaction into a block of a blockchain is known as confirmation. This is why transactions visible on the network that are not yet included into the blockchain are known as unconfirmed. For example, you can see unconfirmed Bitcoin transactions as they appear on the network in real time as you are reading this article by visiting the following page: https://blockchain.info/unconfirmed-transactions

The way the Bitcoin network operates may seem extremely logical and simple. A user initiates a transaction. The transaction becomes visible to the network. Next, the transaction becomes a part of the blockchain. After that, anybody can search the blockchain for the transaction and find its details.

The reason why blockchain technology can streamline so many business processes and operations and disrupt so many industries is that these industries should have processes as simple as the one described above, yet oftentimes the processes in businesses and organizations are anything but simple. Another benefit of blockchain is that transactions become a part of the blockchain very quickly and after they do, anybody can search for them.

Now think, for example, what typically happens when you need to get verification of your higher education degree from a university or a college.

 

Blockcerts App

The university has a database of graduates. There is nothing preventing the university placing the database on blockchain and have alumni access their information in real time. This is something that the Massachusetts Institute of Technology has already done with some of its students in partnership with Cambridge, Massachusetts-based company called Learning Machine. Together, MIT and Learning Machine have created software called Blockcerts. Just like Bitcoin software, Blockcerts software is open source and available at https://www.blockcerts.org/

Using Blockcerts, students can download an app that will create a public key and a private key for the blockchain similarly to how users on the Bitcoin network would create private key and a public key when creating a new wallet on the Bitcoin blockchain. The reason for the existence of the app is that the app streamlines the process of the creation of the keys and makes it extremely easy, so that students do not have to spend time figuring out how to create public and private keys using complex software. For privacy reasons, the blockchain doesn’t actually store the diploma information. What is does store is a record about the existence of a diploma. Then, the school emails a diploma to the student. The diploma has a public key embedded into it. The app of a student has student’s private key and the matching keys prove the validity of the diploma. Not only that, but students can decide when and where they want to show their diploma and can do so 24/7/365, just like users on the Bitcoin network can funds to each other from anywhere in the world to anywhere else in the world at any time of day or night, without having to go to any bank or government institution.

 

Getting verification from a regular school

However, MIT is not a typical school. It is one of the best and most technologically advanced schools in the world. If you went to a regular school, you would be lucky if the school has a portal where you would submit a request for transcripts or a copy of your diploma. After you do so, you will have to wait, typically days to weeks, until a person at the school manually processes your request. The person may send a request to a printer to print a physical copy of your transcript or diploma. Most likely, this would mean more waiting. You may also have to pay a fee for all the printing and processing. Finally, the school mails you the documents, typically via regular mail or an express service. With regular mail, there’s a chance that your documents will get lost in the mail. With an express service, you know that you will get your documents, but the service may be expensive. The typical process from the request of the documents to receiving the documents is long, inefficient, expensive for all parties, includes a lot of unnecessary manual labor, and because of that has plenty of room for mistakes and errors, none of which can even theoretically exist on blockchain. On blockchain, information can be linked to a profile and in a case of mismatch, the network can simply reject the information, leaving it to users to correct the data and resubmit it.

A scenario similar to obtaining a copy of a university diploma happens in a variety of industries. When you go to get a driver’s license, when you buy a home, when you ship something to someone you initiate processes that have multiple inefficiencies and redundancies in them that can be fixed by moving the processes onto blockchain.