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【METI Mobile】What is a Blockchain?

How does your computer verify a transaction on the internet? Until recently, online transactions required third-party authentication, costing users time and posing numerous security risks. Using the innovative blockchain technology originally designed for Bitcoin, online transactions can be made easier and more secure.

Picture representing blockchain

Blockchain technology record transaction histories in chronological order within a chain of encrypted, interlocking blocks. After creation, falsification of any part of the chain is extremely difficult, creating a trusted and secure record of information.

How it works

The Bitcoin blockchain system doesn’t directly manage owner information or keep track of the total amount of Bitcoins. Instead, stakeholders are able to access a complete historical record of Bitcoin transaction data in the blockchain.

Since copies of data in the blockchain are hosted by each user in a network, a failure occurring at one terminal would have virtually no impact on the system as a whole. Due to the decentralized nature of the technology, a system using blockchains can be implemented at a lower cost than existing technologies.

New opportunities through blockchain technology

Application of blockchain technology isn’t limited to only financial transactions. Blockchains can also be used to provide certification in areas such as property ownership, supply chain transparency, and digital copyrights.

For example, if you wanted to sell a property, you would not need to access the registration information managed by the related local government if the data on your electronic signature and the property’s title certificate were managed on the blockchain.

If food and beverage production supply chains were managed using blockchains, the data would help prevent food from being sold illegally past its expiration date. Copyrights on works such as movies and music could also be verified through blockchains.

An estimation by the Ministry of Economy, Trade and Industry (METI) has revealed that blockchain technology applied to different service areas will have an approximately 70 trillion yen impact on markets.

Impact on society

In the coming years, IoT, artificial intelligence (AI), and other cutting-edge technologies are expected to increase the number of transactions between machines, such as a washing machine capable of making automatic orders for new detergent. Blockchain technology, with its distributed information management structure, would be ideal for handling new waves of these AI-based transactions.

Revolutionary innovations like blockchains have the potential to change the fundamental ways our society interacts with technology.

 
Last updated: 2016-06-14
Ministry of Economy, Trade and Industry
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