How Blockchain Timestamping Works

One of the major draws of utilizing blockchain technology is the immutability of it—meaning individuals cannot double-spend their cryptocurrency. But how does this work exactly?

Basically, blockchains use timestamping technology to ensure currency is only spent a single time. Any transactions sent after the time the initial cryptocurrency has been spent are subsequently rejected. Read on to learn more about blockchain timestamping technology.

What is Blockchain Timestamping?

Blockchain timestamping is exactly what it sounds like: it is an entry of an exact time a transaction was processed. This posting of a time is anchoring proof for that specific transaction on the blockchain—meaning it cannot be undone or altered.

Additionally, these transactions and timestamps are posted in a public ledger, ensuring that anyone can verify when exactly a transaction was posted, making the records easy to audit and verify.

Blockchain timestamps are tied to a unique number used to identify a transaction. These unique numbers are randomly generated, and they are known as a hash. Each hash is given an individual permanent timestamp, and both are often used to verify a transaction.  

Why is Blockchain Timestamping Important?

Timestamping is important, as it directs the group of computers running the blockchain (known as a network) where and when certain transactions happened. It allows the computers to know when they can proceed with validation, and when they need to reject a transaction due to it not being valid.

Think of it this way, without timestamping, a malicious actor who had 400 BTC could send 200 to one person, then 250 to another person. Without timestamping, the computer could conceivably process both of these transactions, as at one time, the malicious actor had 400 BTC, meaning he could afford both transactions. This would leave the original wallet in the negative, which is not allowed in blockchain, or it could result in one of the two recipients receiving the same blockchain as the other person, a condition known as double-spend.

With timestamping, the computers in the blockchain know that the malicious actor first spent 200 BTC, leaving him with only 200 BTC, and they can correctly deny the second transaction.

As you can imagine, this is a very basic example, and things only grow more complicated from there. But you get the gist of the problems a blockchain without timestamping would create.

How Does Blockchain Timestamping Work?

Blockchain timestamping may sound complicated, but it is really quite a simple process. First, when someone submits a transaction to the blockchain, a hash is generated to identify that transaction. As we mentioned above, a hash is a randomly generated string of characters. The length of the hash varies from blockchain to blockchain, but most use the SHA-256 algorithm.

Once a hash is generated, no changes can be made to the transaction without cancelling the transaction and regenerating another hash.

Once generated, the hash is sent to the blockchain for processing. Depending on the blockchain, it may be quite a while before the transaction is processed. After processing (as in, the transaction is made), the node posts the hash, with the timestamp of when the transaction was completed, to the blockchain.

The hash ensures that while the transaction time is posted to the ledger for record keeping, the exact details of the transaction are kept private.

**It is important to note that hashing is not as private as many individuals think. Many governments have become adept at tracking transactions from certain wallets under the guise of searching for crimes like money laundering. As a result, many basic blockchains like Bitcoin are no longer considered “private,” leading to the creation of privacy-focused blockchains.

Uses of Blockchain Timestamping

Now, as you can imagine, the timestamping that originated with blockchain isn’t just useful for preventing double-spending. It actually has a wide variety of uses and has been adopted by companies around the world. Below are some examples of how blockchain timestamping is used by businesses.

·      Tracking goods in supply chains, ensuring time-sensitive products arrive on time.

·      Tracking goods in supply chains, assigning hashes to all batches to track contaminations and diseases.

·      Timestamping unique products to verify ownership and stop illegal replication.

·      Timestamping medical records to ensure proper procedures and patient safety.

·      In voting, to prevent individuals from voting more than once.

As you can see, blockchain verification goes much further than just sending cryptocurrency—it is actually a benefit to the entire world, and more companies are adopting it each year.

Companies Currently Using Blockchain Technology

As mentioned above, more and more companies use blockchain each year. Below are some of the major companies we know are utilizing blockchain stamping technology, and what they use it for.

·      J.P Morgan – for Banking Transactions

·      IBM – for supply chain monitoring

·      Walmart – for food supply chain monitoring and tracking

·      Nestle – for food supply chain monitoring

·      Unilever – for food supply chain monitoring

·      Amazon – for their AWS web services

·      Axa – for issuing insurance policies

·      FedEx – for monitoring their supply/delivery chain

And these are just the big companies using the technology; we suspect there are many smaller businesses out there using blockchain for their payment processing, accounting, and more.

Do All Blockchains Use Timestamping?

Timestamping is an integral and critical aspect of blockchain technology, and from our understanding, all blockchains must utilize timestamping in order to be considered a blockchain.

Remember, timestamping is what provides a sense of security and trust to a blockchain. So, if you are approached by someone claiming there’s a blockchain without timestamping out there—you need to explain that’s not a true blockchain.

Without blockchain, you have to rely on a governing entity to tell you when and where things happen. As you can imagine, this is a system riddled with errors and corruption, and the reason why blockchain-based money, called cryptocurrency, was created in the first place.

Overall, timestamping is what makes blockchain usable, so yes, all blockchains must use timestamping, or they are not blockchains. Remember, always ensure you take the time to study and learn about a blockchain before investing, as not all projects are legitimate.