Data Security Is Becoming the Sparkle in Bitcoin

via www.huffingtonpost.com
via www.huffingtonpost.com

Some couples opt for a traditional wedding, while others go for the Elvis impersonator in Las Vegas. But David Mondrus and Joyce Bayo may be the first to have incorporated Bitcoin.

Before about 50 guests at a Walt Disney World hotel in Florida recently, the couple used a Bitcoin automated teller machine to record their written vows on the currency’s so-called block chain — an open ledger that permanently stores information.

“A diamond is forever, a marriage is forever, but when was the last time anyone looked at their wedding vows?” Mr. Mondrus said. “This technology allows us to get that data and store it in a way that is retrievable and noncorruptible.”

As Bitcoin’s price has declined over the last year, critics have been quick to declare the virtual currency dead. Bitcoin’s true value, though, might be not in the currency itself but in the engine that makes it possible.

Underlying Bitcoin — created as a way to make payments directly, anonymously and outside government control — is the block chain, a decentralized database that is driven by cryptography.

Explaining how the block chain works can tangle the tongues of even those who are most enthusiastic about Bitcoin. Most resort to metaphors or diagrams. At a basic level, the block chain is a searchable ledger where all transactions are confirmed, in a matter of minutes, by a network of computers working to perform complex algorithms. Each part of the network maintains a copy of the ledger. About six times an hour, a new group of accepted transactions — a block — is created, added to the chain and broadcast to the other parts of the network. In this manner, all transactions are recorded and linked and thus can be traced. It is nearly impossible to modify past blocks in the chain.

By simply downloading the Bitcoin software, anyone can gain access to the block chain, search it and submit transactions to the network.

Entrepreneurs worldwide are now working to harness that technology for use beyond Bitcoin transactions. The block chain, they say, could ultimately upend not only the traditional financial system but also the way people transfer and record financial assets like stocks, contracts, property titles, patents and marriage licenses — essentially anything that requires a trusted middleman for verification.

“There’s a race going on to extend the block chain’s capabilities,” said Adam Ludwin, a co-founder of Chain.com, a start-up that seeks to help developers build Bitcoin applications.

Read more: Data Security Is Becoming the Sparkle in Bitcoin

 

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