If you don't know what blockchain is, this guide will let you finally understand it
Bitcoin is a controversial and polarizing subject. Outside of the large group of investors who are enjoying a new iteration of the gold rush, it is gaining more opponents who warn about it being a quickly growing cryptocurrency bubble. But unlike bitcoin, the technology underlying it has only enthusiasts. Blockchain turned out to be the answer to many problems currently experienced by companies and institutions in the digital era.
But what exactly is blockchain? Many people find it difficult to understand how the solution works. I will try to explain it in simple terms. However, since this is a pretty complex issue after all, I will divide my guide into several parts. Today I will tell you about the hash sum.
Related: Central Bank Agrees to Raise Limit for Contactless Payments Without PIN to 100 zł
A hash sum protects information stored and processed in blockchain-based databases. Despite its name, it has nothing to do with Twitter or Instagram hashtags. It's more like a checksum in your own bank account number.
The checksum helps you enter your account number correctly, for instance when filling out a bank transfer form. If you correctly enter the first two digits of the account number - which are the checksum - the banking system will automatically detect any mistake in the rest of the account number. Knowing the checksum doesn't make it any easier to guess the whole account number because it would require calculating all of the possible combinations. But if you know the 24 digits of an account number, you can apply a mathematical formula and calculate the checksum - there will only be one for a given sequence of 24 numbers.
Related: Garmin Pay to Become Available at Second Bank in Poland
- A hash sum is a sort of checksum, but it's much more complex - it is composed of not a measly two, but over 20 digits. You can calculate it based on any piece of information saved in a computer file. It can be photos, films, music, text and numbers, for instance accounting data. You can't recreate a photo, text or numbers saved on a computer, smartphone or tablet based on its hash sum. But if somebody knows the file's hash sum, and you share that file with them, they will be able to see if the hash sum matches the specific information saved on your device. If you make even the slightest change to the file after its original hash sum was calculated, the hash sum will change. In that case the person who knows the real hash sum will be able to detect the change - says Andrzej Horoszczak, founder and CEO of Billon, a company specializing in creating blockchain-based technologies.
In the next part of this guide you will find out what the connection between hash sums and blockchain is. Check back next week.