Internet 2.0 – An Era Of Internet Of Value
In an era wherein at the blink of an eye, it is easy to make or lose a fortune; it is important for one to be absolutely aware of the world around us. The world on the Internet is fast growing and encompassing all things that make up life as we know it, and one of the latest additions to the list of such things is the idea of the blockchain. According to Don Tapscott and Alex Tapscott, “The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”
A blockchain is a ledger in the true sense of the word, i.e., it maintains and records the history of transactions. However, it is a new age technology that has been designed for preserving and storing data without the downsides of it – corruptibility, storage issues, etc. In the crudest of terms, let us take block 0. There is data stored in block 0. Now let there be a block 1 that comes soon after this. Block 0’s data is now condensed and then transferred onto block 1. So there remains an imprint of block 0 in block 1. This goes on until block n. This way, blockchain technology makes sure that no data is unavailable for use.
This data is stored and treated not just as data but as records for transactions of anything of value. This is where the concept of cryptocurrency comes into the picture – be it Bitcoin, Litecoin and the like. This is what makes the internet space of value and not just exchange of data alone. One of the essential features of this drive is tokenization.
What is a token?
Tokens power the world of the blockchain, and in the internet, the lingo is referred to as coins. They are data security units that are employed to keep track of any sort of credit transaction. They are absolutely essential not because they contain sensitive information but because they replace it. They are representations of the value of any kind – not just monetary. However, they have no value of their own per se as they are randomly generated. This is the kind of encryption involved in the process of tokenization.
How do they work?
Tokens are products of encryption where sensitive information is swapped with a randomized string or number, thereby securing your essential details that were part of your transaction online. This is key to the theory of the “vault” that ensures security while dealing with cryptocurrencies. Whatever payment/transfer client one is dealing with, they will only remember the token as a pointer to your transaction and never your original details such as your PAN number and the like. This swapped original data is now stored in a secure cloud vault that can be accessed as and when needed.
This is essentially how a blockchain functions and provides the attribute of efficacy to the idea of cryptocurrency and legitimacy to it existing without nearly 99% security threats that it would otherwise be subjected to. Money and credit as we know it has are now changing into something that may not be tangible but of immense value nevertheless and blockchain is what is at the center of making it happen.