Blockchain is still a relatively new term in the tech and digital marketing world. What is blockchain? How does it work? Who is using blockchain? And some comments on whether this is the future of technology & digital marketing?
In this article, we will thoroughly learn about blockchain, current concepts and applications and the near future!
Table of Contents
What is blockchain?
Digital information is distributed but not copied. Blockchain technology has created a stronger backbone for the internet environment.
Initially, blockchain was developed for digital money (digital currency), Bitcoin. The modern tech community has found potential applications from this technology.
Block-chain, in its simplest terms, is a series of immutable data records. Timed and managed by a cluster of computers not owned by any entity.
Each of these data BLOCKS is secured and bound together by encryption principles called CHAIN. So blockchain is also known as blockchain.
Block-chain is an unbreakable digital ledger of financial transactions. Can be programmed to record not only financial transactions, but almost anything of value.
According to Don & Alex Tapscott
In the financial world, applications are clearer and revolutionary changes are imminent. Blockchain technology will change the way stock exchanges work. Loans and insurance contracts.
Blockchain technology will eliminate bank accounts and services provided by banks. Almost every financial institution will go bankrupt or be forced to make radical changes,
Once the advantages of a secure ledger with no transaction fees are widely understood and implemented. After all, the financial system is built on cutting a small amount of your money for a transaction.
Bank staff will become mere advisors, not cashiers. The stockbroker will no longer be able to earn commissions and the buy / sell spread will disappear.
What is blockchain technology?
Blockchain technology described: A party to a transaction starts the process by creating a block. This block is verified by thousands, perhaps millions of computers distributed on the network. The verified block is added to a chain. Stored on the network, the creation is not just a single record. It is a single record with a unique history.
Blockchain technology does not create transaction costs (Infrastructure costs have, but no transaction costs). Blockchain is a simple yet ingenious way to transfer information from A to B automatically and securely.
If you want to take advantage of blockchain technology. You should be familiar with blockchain wallet and how it works. The actual number of blockchain wallets reached more than 25 million users by the end of June 2018.
Blockchain Wallet is a digital wallet that allows users to manage bitcoin and ether. Blockchain Wallet is provided by a software company BLOCKCHAIN. Founded by Peter Smith and Nicolas Cary.
The purpose of Blockchain Wallet is just a place to store Bitcoin, Ethereum, NEM, Dash, not a place to buy, sell, and exchange.
How blockchain works
A workbook is duplicated thousands of times on a network of computers. Then imagine that this network is designed to regularly update this spreadsheet, and that is the underlying blockchain principle.
Information stored on a blockchain exists in the form of shared and continuously regulated databases. This is one way to use the network with obvious benefits.
Blockchain database is not stored in any location. That means the records it holds are really public and easy to verify. There is no centralized version of this information for hacker outreach.
The reasons why blockchain became a technology trend in the 4.0 era:
- It does not belong to any particular entity
- Data is stored encrypted
- Blockchain is immutable, so no one can interfere with the data inside the blockchain
- Blockchain is transparent so people can track the data if they want to
3 core values of the blockchain
These 3 characteristics make blockchain technology so powerful. And many technology developers are interested, looking for approaches to application. Here is a detailed analysis of the 3 above characteristics:
One of the most interesting and misunderstood concepts in blockchain technology is user transparency. Some say that blockchain gives you privacy while some say it’s transparent. Why do you think that happened?
A person’s identity is also hidden through complex cryptography and is only represented by their public address. So if you’re looking for a person’s transaction history, you won’t be able to see that information. All are encoded in the form of character strings eg “hhacsacksMalcflsa3dvfabdhSwf….”
So while the user’s real identity is secured. We’ll still see all transactions made by their public address. This level of transparency has never existed before in a financial system. It adds that the degree of responsibility is higher, and is essential.
Immutability, in the context of blockchain, means that once something has been entered into the blockchain, it cannot be tampered with.
Blockchain acquires this property due to the Cryptographic Hash Functions.
Simply put, hashing means taking an input string of any length and giving an output of a fixed length. In the context of cryptocurrencies like bitcoin, transactions are made as inputs and run through a hashing algorithm (Bitcoin uses SHA-256) yields a fixed-length output.
A cryptographic hash function is a special class of functions that have different properties that make it ideal for encryption. There are certain properties that a cryptographic hash must have in order to be considered secure.
You have a centralized entity that stores all of the data, and you must only interact with this entity to receive any information you request.
Another example of a centralized system is banks. They store all your money, and the only way you can pay someone else is by going through the bank.
In a decentralized network, if you want to interact with your friends. You can do this directly without going through a third party. That is the main ideology behind Bitcoin.
You and you are solely responsible for your money. You can send your money to anyone you want, without going through the bank.
See also: What is Bitcoin? How Bitcoin was created
So what happens?
A decentralized system, information is not stored by a single entity. In fact, everyone in the network owns the information. And that fact may still have flaws:
Since they are centralized, all data is stored at one point. This makes them easy to target for hacker behaviors
If the centralized system gets software upgrades, it will stop the entire system
Worst case scenario, what if this entity becomes corrupted and malicious? If that happens then all data inside the blockchain will be compromised, …
The interesting point is that after Bitcoin and BitTorrent came along, everything changed.
Who will use blockchain?
Blockchain has the ability to cut out the middleman for different types of transactions. Personal computers became accessible to the public with the invention of a user interface (UI), in the form of a desktop computer.
Similarly, the most popular UI created for blockchain are applications known as Wallet applications. People use to buy things with Bitcoin and store it alongside other cryptocurrencies.
Blockchain offers internet users the ability to create value and validate digital information.
Some of the applications for doing business with blockchain include:
- Smart contracts
- Sharing economy
- Crowdfunding (Crowdfunding)
- Supply chain auditing
- File storage
- Data management (Data management)
- Stock trading, …
The technology of the present and the near future
Like a technology revolution. Blockchain is truly a mechanism to bring people to the highest degree of responsibility. No more missed transactions, human or machine errors. Or even an exchange not made with the consent of the parties involved.
On top of that, the most important area that Blockchain helps is to ensure the validity of transactions. By recording not only on the main registers, but also the distributed registry systems that are connected. All are connected through a secure authentication mechanism
Refer: Blockchain – Wikipedia