Tag: blockchain technology

  • Blockchain transaction – How It Works?

    Blockchain transaction – How It Works?

    What is Blockchain Technology?
    What is a blockchain transaction, how it works, how is it useful for everyday life

    By Guy Avtalyon

    A blockchain transaction is a public record of all bitcoin transactions that have ever been executed. A block represents the current part of a blockchain. It records the recent information. When a block is completed, it becomes part of the blockchain. As a permanent database creating a new block. Blocks are connected to each other like a chain in real, consecutive order. Every following block contains a hash of the previous block. Blockchain Technology is one of the hottest and most interesting technologies in the present market.

    The first blockchain transaction

    The first transaction in the real-world took place on 22 May 2010. Laszlo Hanyecz made it. He bought two pizzas in Jacksonville, Florida for 10,000 BTC. In five days, the price grew 900%, rising from $0.008 to $0.08 for 1 bitcoin.

    From a technical point of view, the most fundamental definition of a transaction is an atomic event that is allowed by the underlying protocol.

    Speaking about bitcoin, transactions are ordinarily individual payments.

    Lena sends John 10BTC.

    If the word transaction conjures up a financial transaction in your mind, this is appropriate. The bitcoin blockchain is basically a list of all the bitcoin transactions since Bitcoin began. Bitcoin is only one of many blockchains. Not all blockchains limit their utility to payment transactions. Let’s say, transactions are payments when you think of the blockchain as a distributed ledger. The ledger that keeps a record of who owes who how much bitcoin. 

    Is the blockchain a data structure?

    No, if you consider the blockchain as a data structure then a transaction would be just one of the events that update the data store. But there is a huge difference. Before invent of blockchain you had a situation that one event was able to update only one data table on one the particular machine. With blockchain, such a single event is updating a data table on every machine connected in the chain no matter where it is on the planet.

    Blockchain Transactions are nothing special.

    It is the same as in any other database. To keep it simple, a blockchain transaction is a transaction record in a blockchain. Just like you store a record in MySQL database. It’s exactly the same.  The blockchain is a database. Transactions get stored in the form of blocks and the blocks form a chain to form the blockchain.

     

    Is blockchain transaction safe?

    Blockchain transactions are safer and more effective for most companies. And hence the demand for quality blockchain platforms which can be tapped for ensuring greater security.

    Blockchain transactions are analogous to a wire transfer or cash transaction. Payment is done directly from one party to another. All without going through another financial institution. And without any third-party oversight. Payment processing is done over a private network of computers.  Every single transaction is recorded in a blockchain, which is public.

    Say, blockchain transactions are a feature of blockchain technology’s mainstream feature – cryptocurrencies.

    Cryptocurrencies rely on the blockchain. Each block in the chain holds records. The records are the information of each and every transaction! The transaction’s information gets stored on blockchain ledgers.

    What is blockchain in essence? 

    • A distributed ledger
    • A consensus protocol
    • A membership protocol

    Blockchains transactions require consensus.
    This means the participants must agree on who’s going to extend the blockchain, and how!

    Public blockchains such as Bitcoin, Ethereum use consensus that looks like a crypto-lottery. For example, miners have proof-of-work which is crypto-puzzle and in that way get their lottery tickets. The one who wins this “game” gets the reward. The reward is permission to add one block to the blockchain and, also, such can print new money.
    All miners try to approach to the longest chain.

    This procedure is using to get consensus. It will take time, around 10 minutes. Transactions are not taken as fully confirmed for about one to two hours. After that point, they are adequate “deep” enough in the ledger.

    Introducing an opposing account of the ledger, called as a fork, would be computationally exclusive. This stoppage is a susceptibility to the system. And also an important obstacle to the use of bitcoin-based systems. It is necessary for fast-paced transactions, such as monetary trading.

    But we have to be honest, in spite of privacy-enhancing technologies such as encryption and identity management, someone can see blockchain transactions throughout network nodes. These produce metadata. So statistical analysis can reveal information even from encrypted data. As a result, it can allow for pattern recognition.

    But quite frankly, away from someone cracking the cryptology. The blockchain transaction is one of the most secure digital capabilities available.

    Advantages of blockchain transactions

    Maintaining records of transactions is an essential function of all businesses. Hence, these records have to track the past performance of the company.  And also, help with forecasting and planning for the future. And most organizations’ records take a lot of time and effort to create. That’s why the creation and storage processes are prone to errors. And these transactions have to be executed immediately. Yes, the settlement can take more time, from several hours to several days.

    On the blockchain, the process of transaction verification and is recording.  Let’s say, it is immediate and permanent. Because the ledger has distribution across several nodes. So, this provides the data to replicate and store instantaneously. On each node across the system.

    What is recording in blockchain?

    Recording in the blockchain means to note details of the transaction such as price, asset, and ownership. And also, they are verified and settled within seconds across all nodes. But, when registering the change on anyone ledger, you are registering simultaneously on all other copies of the ledger. Because each transaction is transparent.  And permanently recorded across all ledgers. It is open for anyone to see. So there is no need for third-party verification. 

    Blockchain technology will disrupt the way we write. And enforce contracts, execute transactions, and maintain records.

     

  • Blockchain Technology – Is There Future For It

    Blockchain Technology – Is There Future For It

    2 min read

    What is Blockchain Technology?

    Blockchain technology provides transactions and transfers online without the use of an intermediary.

    The Blockchain is a new name in the world of technologies but it is definitely the one to last. Even in the early stages, the technology has gained huge popularity starting with their very first application of cryptocurrencies. More areas of applications are being discovered and tested with each passing day. Once the technology is adopted and accepted on a global level, it’ll transform the way we live today.

    Blockchain technology simply means a decentralized trusty network. It works by having a native asset, a decentralized ledger and some algorithms based around a game theory model. It allows everyone on the network to reach consensus.

    Let me try to explain what blockchain technology is 

    The traditional way of sharing documents with collaboration is to send a Microsoft Word document to another recipient and ask them to make revisions to it.

    The problem with that scenario is that you need to wait until receiving a return copy before you can see or make other changes. This because you are locked out of editing it until the other person is done with it. That’s how databases work today. Two owners can’t be messing with the same record at once.

    That’s how banks maintain money balances and transfers. They briefly lock access (or decrease the balance) while they make a transfer. Then update the other side, then re-open access (or update again).

    With Google Docs (or Google Sheets), both parties have access to the same document at the same time. And the single version of that document is always visible to both of them. It is like a shared ledger, but it is a shared document. The distributed part comes into play when sharing involves a number of people.

    Efficiency and effectiveness

    Imagine the number of legal documents that you can use that way. Instead of passing them to each other, losing track of versions. And also not being in sync with the other version. So, why can’t *all* business documents become shared instead of transferred back and forth? So many types of legal contracts would be ideal for that kind of workflow.

    You don’t need a blockchain technology to share documents, but the shared documents analogy is a powerful example.

    Far from a short-term trend, blockchain technology is revolutionary. It is a new approach to transactions that major companies are beginning to implement. 

    In a market saturated with new and innovative business strategies, it can be difficult to decide which to adopt. On one side you don’t want to fall behind when it comes to the latest technology.

    On the other, you don’t want to waste your money on a “cutting-edge” fluke. If you’re looking for a new, efficient way to carry out transactions, blockchain is a technology that your company might find helpful.

    What is Blockchain Technology? 1

    What Blockchain technology requires

    You might ask why blockchain technology seems so cryptic. The challenge is that it used to be almost exclusively connected to tech circles.  And was not widely used by the general public and non-tech businesses. This history is part of why it seems so mysterious today.  Because it’s relatively new to most of us, and the way it works can be difficult to explain without going into confusing and complex concepts.

    Blockchain technology was originally developed for bitcoin, the base of other cryptocurrencies. But the blocks in a blockchain might contain information about identity, dates, or most anything.

    Marc Andreessen from VC firm Andreessen Horowitz and American entrepreneur, investor, and software engineer called Bitcoin and the underlying blockchain technology a “breakthrough in computer science”.

    “The practical consequence (…is…) for the first time, a way for one Internet user to transfer a unique piece of digital property to another Internet user, such that the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place, and nobody can challenge the legitimacy of the transfer. The consequences of this breakthrough are hard to overstate.”

    Comparisons

    In a 2014 New York Times op-ed, Marc Andreessen, likened Bitcoin to personal computers and the Internet in their early days. Each of which depended on the high expectations of their success to make them actually successful.

    “This is the classic ‘chicken and egg’ problem with new technology: new technology is not worth much until it’s worth a lot,” he wrote about blockchain technology.

    By allowing digital information to be distributed but not copied, blockchain technology created the backbone of a new type of internet. It is originally developed for the digital currency, Bitcoin. But the tech community is now finding other potential uses for the technology.

    The short version of it:

    Blockchain technology provides a way to make transactions and transfers online without the use of an intermediary. Instead of trusting a third party to keep the transaction history safe and accurate, blockchain technology lets you seal “pages” of transactions with a key code for security.

    With blockchain technology, many people can write entries into a record of information. And a community of users can control how the record of information is amended and updated. Likewise, Wikipedia entries are not the product of a single publisher. No one person controls the information.

    But a feature that Wikipedia does not share with the classical blockchain is encryption. Because ownership and anonymity is an important feature of blockchain technology. Encryption of information is necessary so that no one can steal data or duplicate them.

    Individuals and businesses use blockchain technology for a variety of reasons. Though some “shady businesses” might use blockchain technology to avoid leaving a paper trail, it’s more often employed to gain improved assurance and privacy. It also allows users to exchange money without the backing of physical currency. This is one of the qualities that has made Bitcoin famous and makes it sometimes controversial.

    How To Make Money With Blockchain Technology? 2

    Bottom line

    There’s a wide variety of blockchain technology-based services on the market.

    One of the most relevant reasons that many companies are adopting blockchain technology is efficiency. We can all realize how exchanges can become quicker. And simpler too, when they don’t have to go through a third party. It’s also beginning to move document authentication toward obsolescence, removing a step in the transactional process.

    Blockchain technology can also make companies feel like their information is safer and more secure. In an age where hacking banks cannot always resist off attempts to attack people’s financial privacy. Therefore, blockchain technology is a way to feel a greater sense of control over transactions.

    Major companies are adopting blockchain technology because they don’t want to miss out on what could become. And it is already extremely popular and efficiently.

    “In the mid-to-late 2000’s, big companies missed the social media train,” marketing and business strategist Clay Hebert said. “They couldn’t see how Twitter or Facebook would immediately impact their business, so they were slow to adopt these technologies. They don’t want to play catch-up again.”

    Risk Disclosure (read carefully!)

  • How To Make Money With Blockchain Technology?

    How To Make Money With Blockchain Technology?

    The 21st century is all about technology, a new addition to the pack is Blockchain technology.
    There are many ways you to make money with Blockchain

    2 min read

    How To Make Money With Blockchain Technology?
    The Blockchain is the revolutionary technology impacting different industries miraculously was introduced in the markets with its very first modern application Bitcoin. Bitcoin is nothing but a form of digital currency (cryptocurrency) which can be used instead of fiat money for trading. And the underlying technology behind the success of cryptocurrencies is termed as the Blockchain technology.  

    With the increasing need for modernization in our everyday lives, people need to accept new technologies. From using a remote for controlling devices to using voice notes for giving commands; modern technology has made space in our regular lives. Technology like augmented IoT that have gained tread in the past decade and now there’s a new addition to the pack i.e. Blockchain technology. 

    Actually, the 21st century is all about technology.

    There’s a misconception that Bitcoin and Blockchain are one and the same, however, that is not the case. Creating cryptocurrencies is one of the applications of blockchain technology and other than Bitcoin, there are numerous applications that are being developed on the basis of blockchain technology. The blockchain is just a public ledger of transactions on the bitcoin network.

    Before we tell you how to make money with blockchain technology, there are several things you have to know.

    Though blockchain technology has evolved to many levels since inception, there are two broad categories in which blockchains can be classified majorly i.e. Public and Private blockchains.

    At first, let’s keep a check on the similarities that both public and private blockchain have:

    • Both Public and Private blockchain have peer-to-peer decentralized networks.
    • All the participants of the network maintain the copy of the shared ledger with them.
    • The network maintains copies of the ledger and synchronizes the latest update with the help of consensus.
    • The rules for immutability and safety of the ledger are decided and applied on the network so as to avoid malicious attacks.

    And let’s see the differences between them.

    Public Blockchain – It is a permissionless ledger and can be accessed by any and everyone. Anyone who has access to the internet is eligible to download and access it, can check the overall history of the blockchain along with making any transactions through it. Public blockchains usually reward their network participants for performing the mining process and maintaining the immutability of the ledger. An example of the public blockchain is the Bitcoin Blockchain. 

    Public blockchains allow communities all over the world to exchange information openly and securely. However, an obvious disadvantage of this type of blockchain is that it can be compromised if the rules around it are not executed strictly. The rules decided and applied initially have very little scope of modification in the later stages.

    Private Blockchain – Opposite to the public blockchain, private blockchains are shared only among the trusted participants. The overall control of the network is in the hands of the owners. The rules of a private blockchain can be changed according to different levels of permissions, exposure, number of members, authorization, etc.

    Private blockchains can run alone or can be integrated with other blockchains too. These are usually used by enterprises and organizations. So we can say, the level of trust required amongst the participants is higher in private blockchains.

    How To Make Money With Blockchain Technology? 1

    Ways to make money with Blockchain technology

    Though Bitcoins and cryptocurrencies are the first popular application of Blockchain technology, they are not the only ones. The nature of Blockchain technology has led businesses, industries, and entrepreneurs from all around the world to explore the technology’s potential and make revolutionary changes in different sectors. The variety of blockchain technology-based businesses with paths to profitability is striking. Here are four that illustrate the width of innovation the blockchain marketplace is bringing to potentially profitable business ideas. While Millennials are certainly moving towards “alternative career paths” more often than their Generation X or Baby Boomer counterparts, there are countless ways for absolutely anyone to capitalize on the new wave of oncoming technology. Here, you’ll find an awesome starting point for making money and freelancing with blockchain technology.

    Let’s see how Blockchain technology can be useful in actual implementation.

    Mining

    Mining cryptocurrency is considered the granddaddy of making bank on blockchain technology. Here’s a quick rundown of how the blockchain technology works in this example. Multiple transactions make up a block. Miners verify blocks through a process. They apply a mathematical formula to each block, turning it into something make money blockchain called a “hash.” Essentially, a hash is an alphanumeric sequence. The hash is then stored at the end of the blockchain. When each block’s hash is created, it uses the previous block’s hash. More or less, this is the digital version of a wax seal.

    So, once a block has been “sealed off,” a flurry of activity happens. The first miner to produce the hash receives a reward.  As more of the cryptocurrency is mined, the rewards are halved. The process itself is pretty straightforward. What’s not straightforward, though, is actually making it happen.

    Since so many people have computers strong enough to mine, it’s far more difficult to make it a lucrative endeavor. Instead, mining pools have popped up. Mining pools are just groups of people working together to mine. If the pool wins, everyone in the pool has distributed a portion of that winning. That’s not to say, though, that mining smaller altcoins on your own isn’t a possibility.

    Trading

    This is definitely a lucrative way to make money with blockchain technology.

    Cryptocurrencies reside on exchanges, just like fiat money. However, they have much more in common with stocks. Because cryptocurrency markets are so volatile, they can feel like more of a risk than they’re worth. But, to make money with them you just need to be aware of trends and do your research. Know the specific risks associated with trading. There are literally thousands of cryptocurrencies on the market.

    On the flip side, if you choose to hold on to certain cryptocurrencies, you are considered a hodler.

    Do your research. Read up on the market. Trading crypto is crazy fun, regardless of if you make money.

    Freelancing

    The models are different but one thing is consistent – the freelance marketplace is growing rapidly. For entrepreneurs looking to build startups on the blockchain technology, companies looking to find reliable, qualified freelancers looking for a fair and transparent platform with quick payments and low fees, the boom of cryptocurrencies and the blockchain technology is the new holy grail in freelance work exchange.

    There are other ways you can make money with blockchain technology.

    • Build your own blockchain
    • Build something useful on top of someone else’s blockchain and sell it as a service
    • Help someone who is building a blockchain or blockchain application to find a customer or sell their blockchain technology
    • Invest in a business doing the above
    • Learn more about blockchain technology and teach/run courses or webinars about blockchain
    • Look for problems or businesses that have an urgent or important problem that could use a blockchain type solution and build a business case
    • Get involved in an event – like a hackathon, conferences or workshop – in related industries like fintech, cryptocurrency, etc
    • Volunteer or get experience working for various blockchain companies
    • Download, install or register for a blockchain app and play around with it, see if there’s anything you could do with it
    • Go online and explore blockchain forums, discussion groups or communities and see what opportunities may be available or advertised and speak with those groups/companies

    How To Make Money With Blockchain Technology? 2

    Choose how big a wave you want to ride. If you are still learning, don’t go for that massive wave, it will kill you. You can have fun and make money from the smaller waves. Don’t let media hype distract you from this. Media make money talking about the megastars – such as Bezos and Zuckerberg – who are riding the mega waves. The story of somebody making a life-changing amount of money in a tiny niche market won’t sell page views, but yet there are millions of these stories and one of them can be you.

    Bottom line: The blockchain technology seems to be growing with each passing day. Although, many claim this to be a bubble that will soon burst. However, the pace of improvement and increasing application in different fields shows that it is here to stay. There is no domain which in untouched with the impact of Blockchain technology. Companies in healthcare, medical, transportation, retail, etc. are eyeing towards this technology as a probable solution to the issue of safety. This has made more and more companies invest money in Blockchain companies. Hence, we have them earning more and more money.

    Many companies are also investing in blockchain technology, and thus, it is garnering the attention of many. Blockchain came into existence in 2009, and since then it has never looked back. It is here to stay.

    Risk Disclosure (read carefully!)

  • Blockchain ‘Interesting’ But Hyped

    Blockchain ‘Interesting’ But Hyped

    Blockchain not the best technology for every considered use, says Australian government report.

    2 min read

    Australia: Blockchain 'Interesting' But Hyped
    What a change!

    In May, Australia’s Department of Home Affairs revealed a plan to investigate blockchain’s potential to bring secure and transparent international trade and supply chain management.

    The chief digital officer of Digital Transformation Agency (DTA), Peter Alexander said: “Blockchain: Interesting technology but early on in its development, it’s kind of at the top of a hype cycle.”  Alexander said at a parliamentary committee meeting on Tuesday, as reported by ZDNet.

    He was further quoted as saying that most of the hype comes from companies seeking to make profits in this area.

    “It’s not that we don’t trust any of the vendors – that would be an unfair characterization – we trust the vendors, but note that the motivation is general sales and making revenue.”

    He said standardization of blockchain might open up more opportunities for its use in providing government services.

    “We’re not saying that blockchain doesn’t have potential but today, without standardization, there is the challenge of blockchain becoming a little fragmented. When we get to the standardized blockchain then the opportunities for it will grow.”

    There is better technology?

    Alexander continued, saying that, “for every use of blockchain you would consider today, there is a better technology.”
    According to InnovationAus.com. Alexander said that one of the defining features of the blockchain, the potential for anonymity, is among the biggest stumbling blocks.

    “Generally speaking when the government is engaging with someone, we want to have a trusted relationship with them. We want to know who they are and give them a personalized service,” he said. “Blockchain is good for low-trust engagement. You don’t know who you’re dealing with but have a series of ledgers that can give some validation and support.”

    Peter Alexander, the CDO at DTA said the technology is worth keeping an eye on but is not yet mature enough.

    According to Alexander, blockchain is at the “top of the hype cycle”, with demand driven by the industry.

    “It would be fair to say that a lot of the big vendors are pushing blockchain very hard. And internationally most of the hype around blockchain is coming from vendors and companies. Not from governments and users and deliverers of services,” he said.

    Interesting timing 

    It is indicated to this opinion was arrived at after the Australian government’s Digital Transformation Agency (DTA) received  AU$700,000 (about US$500,000) from the government in May. That amount came to explore blockchain applications within government services. 

    The Australian government’s DTA has cast doubts over the validity of blockchains for governmental purposes. The agency has been working with a number of government agencies. They wanted to develop prototypes for the use of blockchain to deliver services. Including with the Department of Human Services for welfare payments and cargo settlement.

    On the other side is Australia’s new prime minister, Scott Morrison. He is a fan of fintech, open banking and technologies such as blockchain that will drive Australia’s future.

    As treasurer,  Morrison urged attendees at the Australian Fintech Awards in early August 2018. He wanted to take advantage of the disruption wave sweeping through the global economy.

    “I am frankly counting on you not to stuff this up. You need to make this work…In today’s global economy, the ability for economies to become more productive is not being done the old way: the biggest transformer of productivity [will be] innovation,” he told attendees at the awards, as reported by the Australian Financial Review.

    Unfortunately, Australia is not an isolated case.

    China is another nation that finds blockchain’s anonymity a problem. Earlier this year Chinese students encoded allegations of sexual harassment against a prominent professor on the Ethereum blockchain. They wanted to evade the country’s censors. All social media posts on the issue having been blocked. The same technique was used to spread the news about low quality and counterfeit vaccines, another scandal the government sought to cover up.

    China banned crypto

    But the Chinese government has drafted a new regulation. That ordinance would require users to provide their real names and national ID card numbers when registering for a blockchain service. The policy would also demand that blockchain services remove ‘illegal information’. And before it can be spread among users. Also under the proposed legislation. Service providers would also have obligation to retain backups of user data for six months.  Of course, and to hand it over to the police on request.

    China also banned cryptocurrency trading earlier this year, although. Apparently, this has been less than effective. The Ethereum Hotel recently opened in the country, accepting payment in cryptocurrencies.

    One note to remember. Without the possibility of anonymity, a permanent ledger could also be a powerful tool in the authoritarian regime’s surveillance and control systems.
    Australia: Blockchain 'Interesting' But Hyped 1

    Unlike Australia and China, UK leads the way in blockchain deployments for the supply chain.

    There is some survey conducted by consultancy Capgemini. They researched 450 organizations implementing blockchain in their supply chain. And the result wasn’t surprising.  Only three percent so far took initial experiments into production at scale. Well, the adoption and the technology itself are at an early stage. The Capgemini report identifies a number of current use cases. They are in the range from low complexity/high adoption scenarios. Like the prevention of counterfeits and tracking asset maintenance, for instance. But also more ambitious and complex uses. Like customer loyalty programs, contract labor procurement, and regulatory compliance, for example.

    United Kingdom example

    The UK currently leads the way with production and pilot implementations of blockchain projects in the supply chain. At the same time, the USA leads in terms of funding blockchain initiatives.

    In the UK specifically, the consumer products vertical is the biggest adopter among those surveyed. It is followed by manufacturing and then retail. However, globally manufacturing is in the leads in adopting this technology.

    Capgemini has been working with blockchain technology since 2016. Then it began developing solutions for the financial services industry. The report predicts that experimenting with blockchain will peak in 2020. But it will enter mainstream supply chain usage by 2025.

    While throughout the history there were numerous cases of unfounded fears of new technology. For many potential uses, the blockchain is not mature enough. Or lacks the functionality. Or there is the issue of the anonymity of users.

    On the other hand, this anonymity could inhibit the nefarious motives and actions of less savory governments against their own citizens.

    We will see in which direction the further development of blockchain will go. There is one solid fact: blockchain will survive.

    Risk Disclosure (read carefully!)

     

  • What is Blockchain or Blockchain Technology?

    What is Blockchain or Blockchain Technology?

    2 min read

    What is Blockchain or Blockchain Technology?

    • The blockchain is the mathematical structure for storing data in a way that is nearly impossible to fake.
    • Blockchain technology is an important element of cryptocurrencies. Without it, digital currencies like Bitcoin would not exist. 

    If you are new to blockchain technology or you are already a trader, this article is for you. So, what is the blockchain? The blockchain is an absolutely brilliant invention. The idea of a person or group of people known by the pseudonym, Satoshi Nakamoto. By the time, it has developed into something greater, but still, there is a question: What is Blockchain?

    Every day you can hear about Blockchain technology, Bitcoin, ICO, Ethereum. But do you understand what blockchain is?

    How does it work? Can blockchain be used in business? Will blockchain change the world? This article is aimed to answer all these questions.

    What blockchain is, the best explanation is through the game.

    Imagine you and your friends are on a vacation. Its night, you are sitting around the pit-fire and playing storytelling. One has begun the story with a sentence, you are repeating the sentence and adding up your part, then the other player, etc. The main goal is the chain of sentences which are producing a story. If someone is not able to repeat and add his own sentence, the chain will fall down, it would end. New sentences are nothing without the initiation of old sentences. That exactly what the blockchain is. You added a sentence on your friend sentence, that was a ‘block’. Everyone approved your phrase because it referred to the old sentences, that is a shared ledger.

    From the beginning

    Common people started mistrusting the banks. There lies the birth of blockchain. A mysterious person named Satoshi Nakamoto created a whole new currency. He built the whole system on the principle of decentralization. He created a public ledger, which is synchronizing continuously and everyone is able to witness the process.

    “I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party.”

    These are the words of Satoshi Nakamoto, the mysterious creator of Bitcoin, in a message sent to a cryptography-focused mailing list in October 2008. Included was a link to a nine-page white paper describing a technology that some are now convinced will disrupt the financial system.

    Transform this into real life.

    Let me ask you something. What happens when you send money from your bank account to someone else’s bank account? Your bank acts as a middleman, it verifies and approves the details of sender and receiver through its ledger (a book or other collection of financial accounts. In this case, you must trust your bank to have such transaction. Imagine, when banks are collapsing, will you send your money through banks? Will you be able to trust the middleman?

    What is Blockchain or Blockchain Technology? 2

    How does Blockchain work?

    Suppose, you want to transfer some money to your friend in the other country. You will initiate a transaction, each online transaction will be a reference to ‘Block’. Because it is a public ledger, there will be broadcast to everyone in the network about the block. Constant synchronization of the ledger will be going on. If the people in the network would approve the transaction, then the ‘block’ would be added to the ‘chain’ which is a transparent record of transactions. Hence the name ‘blockchain’. This is how the money would be transferred. Satoshi Nakamoto carefully designed it to prevent the double spending of money.

    What does it mean?

    This problem exclusively belongs to digital currency. We can copy songs and movies from our laptops and paste them in other devices. That file will carry information. And can be copied and reproduced regarding our digital transaction. This will generate new fake currency, which is not part of our original monetary system. We can call it double spending of money.

    Satoshi Nakamoto handled this problem extremely well. He introduced public ledger and an immutable chain of blocks. Every transaction is bundled into a block, every block is processed, authenticated, time-stamped and linked to the previous block.

    This creates an immutable chain

    When you want to send some money from your bank account, your bank will verify and confirm the transaction. Problem is that you have only one confirmation in the banking system. But, in the blockchain, at least 6 confirmations are required for a block to be added to the chain. Contrary, it is rejected. Can you see how blockchain is more secure and transparent?

    Why use blockchain?

    Transparency is one of the reasons why should use this technology. It is about its open source structure. It means that other users of the network can read and confirm or not confirm the information. The essential thing of being open source is that it can’t save logged data without majority blockchain network users.

    Decentralization is other. Next main blockchain reason is the lack of a central data hub. Instead of running a massive data center you save your information in decentralized net, where any user can read, check and authorize any of your actions.

    User controlled networks are also advantaged, a consequence of the decentralization of the network. Instead of holding a third party for data processing, stakeholders decided to control each other and decide what to do next. For instance, the inability to achieve 80% consensus on the update, tied to the bitcoin block, lies in the fact that it was necessary to develop a plug into two separate currencies, bitcoin, and bitcoin cash.

    Faster transaction settlements is another advantage. Blockchain technology works 24 hours a day, seven days a week. That means the blockchain based transaction process is faster.

    When you send the transaction to traditional banks, it will take days to be completely settled. This is due to protocols in bank transferring software, and working time. You also have financial institutions located in various time zones, which delays processing times, but it’s not about blockchain.

    Reduced transaction costs are characteristic. Blockchain allows you to execute transactions without a third party, which is often a bank or a central server. Since the intermediary is absent, this allows you to get rid of imposing expense items.

    What is Blockchain or Blockchain Technology? 3

    Where to use the blockchain

    There are a lot of uses of blockchain technology. Bitcoin or cryptocurrencies is just one application of blockchain. We have Ethereum, which is a platform where different applications can be built, it is more like an Operating System. And other altcoins too, are based on the blockchain. And many other fields. The blockchain is not only about cryptocurrencies.

    In healthcare, the use of digital signatures based on blockchain data allows access only with the permission of several people and full compliance with keys, also allows to regulate the availability and maintain the confidentiality of medical records.

    As a protection, the blockchain technology is creating an impregnable network with the impossibility to get access from the outside. The blockchain technology can improve transparency, speed up work and check corruption in governments all around the world. Probably one of the most popular uses of blockchain technology in the modern world is energy. In order to maximize the rational use of the generated energy,  blockchain technology provides to see how much energy we use, at what hours, etc. There are lots of opportunities with blockchain technology and its immeasurable potential for improving the quality of service provision improving the confidentiality and integrity of data at the same time.

    Bottom line:

    So, what is blockchain? Maybe the best answer is this quotation: ‘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.’ said Don & Alex Tapscott, authors Blockchain Revolution (2016).

    The blockchain technology is extremely powerful and can disrupt many existing organizations. No matter what happens with Bitcoin, Blockchain technology is here to stay, in a more refined and sophisticated manner.

    Risk Disclosure (read carefully!)

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