Blockchain: The new era of communication
Shortly after the 2008 global financial crash, a mysterious white paper emerged from an unknown entity, a person or group calling themselves Satoshi Nakamoto. In this mysterious study, a new peer-to-peer financial system was discussed. It was to use a digital cryptocurrency called Bitcoin, an omen to people being sick of centralized power meddling with economic systems. The technology that was made up to power this new system was referred to as the blockchain.
So, what is blockchain? It’s the underlying technology behind cryptocurrencies like Bitcoin and Ethereum, but its uses go far beyond that. It all sounds complicated, but let me break it down to one sentence, blockchain is a continuously updated record of who holds what. These records are split into connected blocks and then secured using cryptography. The cryptography half simply implies that you’ll take care concerning the records. This is dubbed as automated trust or trust that’s inherently built into the system. The list of records, known as a distributed ledger, is decentralized and available to everyone to see and verify. In addition, the blockchain is tamper-evident and unhackable due to its distributed nature. Everyone knows when a block has been messed with because it is rejected by the rest of the system.
Blockchain has a social perception strongly related to Bitcoin and other cryptocurrencies and most people believe blockchain as something for intellectual tech-savvy criminals or people that are anti-government but the emerging truth is that the blockchain has applications way on the far side cryptos and as a full are nothing wanting revolutionary.
Blockchain is just a special type of data repository that is in itself tamper-evident. Blockchain technology has been called the next stage of the Internet by many but I believe that this is now the next generation of the Internet and that it holds Brobdingnagian promise for each business, every society, and for all of you singly. Our current Internet is the Internet of information. It’s based on the concept of copying and distributing information. If you want to watch a video on YouTube or receive an email, you’re looking at a digital copy of the original but what if we take this further to the next stage? What about assets that provide real value? Like contracts such as a house or car ownership, a stock, a bond, money, votes or digital identities. The problem is you don’t want to have these things as copies. For example, you don’t want to send someone $500 yet still have the original $500 under your name. This was called the double-spending problem by cryptographers.
Despite the name, this basically means the problem of having two digital copies of something that should only have one unique identity. The cryptography component of the blockchain-enabled it to be the primary technology of its kind to unravel the double disbursal downside. It is based on the FITS model. FITS model stands for, F stands for fraud. If you’re in an atmosphere wherever there’s a probability of fraud concerned in numerous transactions, then the blockchain will assist in reducing the probability of fraud actually occurring. The next area of the FITS is the I. If you have an environment where there are intermediaries involved then you may be able to disintermediate those parties if they really don’t provide value. We can get average transaction settlement times from two days down to 15 minutes by taking away middlemen. Throughput, or the number of transactions per second, is another consideration It turns out that Bitcoin can only do ten transactions per second while MasterCard and Visa can do about eighty thousand. And next is the stability of data. For a blockchain application, you do not wish volatile information. You want things that are going to stay the same for at least a while, things such as land ownership titles and personal information.
Blockchain goes even further when we talk about something called a decentralized autonomous organization, a D-A-O, or DAO for short. Because of blockchain technology, we now have the capability to create huge company organizations that are distributed and automated for the first time in history. This has ne’er been done before and will offer close to limitless potential. Before the blockchain we tend to were already halfway there. We have organizations like YouTube that are a mix of the old-style central management with a decentralized user base creating content. A DAO would have computer code that runs the rules and decisions instead of a central management team at the top.
So, this was all about blockchain technology and this article would not have been possible without the help of internet sources like The Verge, Conjoint, etc. If are liking my way of writing and want future articles just subscribe to my blog (it’s free!) and leave a comment if are still confused about anything and suggest me more topics on which I can write.