You may have heard of blockchain in the news, on social media, or from friends. But what does it mean, and why is it essential for Tanzanians? In this article, I will explain the basics of blockchain, how it works, and how it can be used for various purposes. I will also show you some opportunities to make money with blockchain.
What is Blockchain?
Blockchain is a shared database that differs from a typical database in how it stores information. A database is a data collection organized and stored in a computer system. For example, a bank may have a database that keeps track of all the transactions and balances of its customers. Authorized users like bank employees or customers can access and update a database.
On the other hand, a blockchain is a database shared among many users who do not need to trust each other or a central authority. A blockchain stores data in blocks linked together by cryptography, securing and verifying information. Each block contains a batch of transactions or records the network users validate. Once a block is added to the chain, it cannot be changed or deleted. This makes the blockchain immutable, meaning the data entered is irreversible and transparent.
Blockchain was invented in 2009 by an anonymous person or group using Satoshi Nakamoto. The first and most famous blockchain application is Bitcoin, a digital currency that can be sent and received over the Internet without intermediaries, such as banks or governments. Bitcoin uses blockchain to record and verify all the transactions that take place on its network.
How Does Blockchain Work?
To understand how blockchain works, let us use an analogy of a ledger. A ledger is a book or a file that records transactions or events chronologically. For example, a shopkeeper may use a register to record the sales and purchases of goods.
A traditional ledger is usually kept by one person or entity, such as the shopkeeper or the bank. This person or entity can control and update the ledger and grant or deny access to others. However, this also means the ledger can be manipulated or corrupted by human errors, frauds, or hacks.
A blockchain ledger, on the other hand, is distributed among many people or nodes who participate in the network. Each node has a catalog copy and can view and verify its contents. However, no node can alter or delete any entry on the register without the consensus of most nodes. This makes the ledger more secure and reliable than a traditional one.
To add a new entry to the ledger, a node must create a block containing the transaction data and other information, such as a timestamp and a reference to the previous block. The union must also have a unique identifier called a hash, generated by applying a mathematical function to the block data. The hash serves as a digital fingerprint that proves the authenticity and integrity of the block.
The block must then be validated by other nodes on the network using a process called mining. Mining is a way of solving a complex mathematical puzzle requiring much computing power and time. The mystery is based on the hash of the block and some other parameters set by the network protocol. The first node that solves the puzzle gets to add the block to the ledger and receive a reward in cryptocurrency, such as Bitcoin.
The new block is then broadcasted to all the nodes on the network, who update their copies of the ledger accordingly. The latest block also becomes the reference for creating the following partnership, forming a chain of blocks that grows over time. This chain represents the history and state of the ledger, which can be traced back to its origin.
How Can Blockchain Be Used?
Blockchain can be used for many purposes beyond cryptocurrencies. Blockchain can store any information that needs to be shared and verified among multiple parties without relying on a central authority. Some examples of blockchain applications are:
- Banking and Finance: Blockchain can enable faster, cheaper, and more secure transactions across borders and currencies. Blockchain can facilitate peer-to-peer lending, remittances, crowdfunding, and digital identity verification.
- Healthcare: Blockchain can improve data management and interoperability among healthcare providers and institutions. Blockchain can also enhance patient privacy, consent, and access to medical records.
- Supply Chain: Blockchain can increase transparency and efficiency in supply chain management by tracking goods’ origin, quality, and movement from production to consumption.
- Education: Blockchain can store and verify academic credentials and certificates without intermediaries or frauds.
- Agriculture: Blockchain can help farmers and consumers trace the provenance and quality of agricultural products from farm to fork.
- Energy: Blockchain can enable decentralized energy production and distribution by allowing consumers to trade and sell excess electricity from renewable sources.
- Art and Entertainment: Blockchain can create new forms of digital art and media that are unique and scarce. Blockchain can also protect the intellectual property and royalties of artists and creators.
How Can Tanzanians Make Money with It?
Blockchain offers many opportunities for Tanzanians to make money with their skills, knowledge, and creativity. Here are some ways that Tanzanians can benefit from blockchain:
- Investing in Cryptocurrencies: Cryptocurrencies are digital assets that can be bought and sold on online exchanges. Cryptocurrencies have the potential to increase in value over time, depending on the demand and supply of the market. However, cryptocurrencies are also very volatile and risky, so investors should research and be careful before investing.
- Mining Cryptocurrencies: Mining validates transactions and creates new blocks on a blockchain network. Miners receive rewards in cryptocurrency for their work. However, mining requires a lot of computing power and electricity, which can be expensive and difficult to access in some areas.
- Developing Applications: Developers can create and deploy applications for various sectors and industries using programming languages and tools. Developers can also earn money by offering their services to clients or joining blockchain projects as freelancers or employees.
- Educating Others about Blockchain: Educators can teach others about blockchain and its benefits through online courses, workshops, seminars, or podcasts. Educators can earn money by charging fees or accepting donations for their content or services.
- Creating Blockchain Content: Content creators can produce and share related content, such as articles, blogs, videos, podcasts, or social media posts. Content creators can also earn money by monetizing their content through advertising, sponsorship, or subscription.
- Participating in Blockchain Communities: Community members can join and contribute to communities, such as forums, chat groups, social networks, or events. Community members can also earn money by receiving tips, rewards, or tokens for participation or contribution.
Blockchain is a new way of sharing and storing more secure, transparent, and efficient data than traditional databases. It can be used for various purposes that benefit Tanzanians in different sectors and industries. It also offers many opportunities for Tanzanians to make money with their skills, knowledge, and creativity. However, it also has some challenges and limitations that must be addressed. Therefore, Tanzanians should learn more about blockchain and its potential impact on their lives and society.
If you want to learn more about blockchain, you can visit some of the following websites:
- Investopedia: A website that provides information and education on finance, economics, and investing.
- Stellar: A website introducing Stellar, a platform enabling fast, low-cost cross-border payments.
- IBM Blockchain: A website that showcases IBM’s blockchain solutions and services for various industries.
- IBM Developer: A website that offers tutorials and resources for developers who want to learn and build blockchain applications.
- Bitcoin News: A website that covers news and trends on Bitcoin and other cryptocurrencies.
- CryptoCurry: A website with articles and stories on technology and innovation.: Community members can join and contribute to communities, such as forums, chat groups, social networks, or events. Community members can also earn money by receiving tips, rewards, or tokens for participation or contribution.