What is Blockchain?

What is Blockchain?

The technical development of the world, the emergence of Bitcoin and other cryptocurrencies, the launch of specialized exchanges, and forks are all connected with the Blockchain network that many users have heard about. But do you fully understand what is Blockchain, its advantages, and disadvantages?

Today we’ll try to explain the complexity of the concept of Blockchain technology and see why even skeptics say that further development of the world would be practically impossible without Blockchain platforms. And what is especially important, this method can become basic not only in the cryptosphere but also interest other directions. So let’s not waste time and discover how Blockchain works.

What is Blockchain?

Blockchain what is it - if you don’t particularly go into technical details, then the very scheme of the entire Blockchain system can be explained quite simply. Figuratively speaking, this is a virtual ledger that every user of the system has, which is regularly updated as a result of events.

    So, in such a book it is possible to record any event. Starting from financial transactions with any cryptocurrencies and ending with the voting results when choosing a government or just your personal data.
    It would seem there is nothing special in the Blockchain project. However, the key difference between the Blockchain ledger and existing databases is the fact that the virtual pages (information blocks) of this account are simultaneously stored by all network participants, regularly updated and double-checked. So, if someone wants to trick or hack this system, trying to remove or add a new page, then the whole system will immediately make a request to thousands of other versions of this book, find a discrepancy in the structure of blocks and discard incorrect changes. That is if someone enters the Blockchain data that, for example, a specific residential apartment belongs to you with all the relevant documentation, then no attackers and entire government agencies will be able to deliberately distort this information and transfer your property to anyone else.

    How does Blockchain Technology Work

    The entire base system of Blockchain technology is an ever-growing sequence of blocks that are distributed among users using a peer-to-peer network. Many people use the same networks to upload and download torrent files. So, in each new block of application of Blockchain, a certain time stamp is added, which is called a hash sum - the easiest way is to present it in the form of unique fingerprints.
    Such blocks are strictly in the order established by the system fit into a kind of chain. This is where the name of the Blockchain technology comes from. As it has been mentioned earlier, if someone tries to rearrange the established sequence of blocks in Blockchain work, such a chain will be rejected by the system due to many violations in structure and hash sums themselves. And just so that no one can change the timestamps from the blocks and recalculate all the hash sums, the Blockchain system uses several protection methods. This is how Blockchain works.

    Who owns blockchain technology

    Now it’s high time to learn who owns Blockchain technology. Blockchains are divided into public and private, as well as Blockchains owned by the consortium. Public Blockchains include the networks of most cryptocurrencies and projects which we know and the maintenance of which is directly involved in the network participants. Private Blockchains, in turn, are controlled by a specific person or organization, where users have limited access rights to data. In this regard, private Blockchains cannot be considered truly decentralized networks.
    As for the networks owned by the consortium, in them, transactions are processed by pre-selected nodes. For example, an alliance from several financial institutions can use a similar network to conduct secure transactions between participants.

    How to use Blockchain technology

    In addition to the already world-famous digital currency, the promising technology of the entire blockchain system attracts the close attention of even traditional financial sectors. According to the SantandaterInnoventures fund, at the end of 2017, more than 48 successful cases of using the technology in the field of traditional “fintech” were recorded. In addition, we must not forget about Smart Contracts Development, thanks to which you can get rid of a lot of problems with legal red tape and bureaucracy.

    So, today many electronic notaries, such as Stampery, certify documents built on the Blockchain. Another successful application of the system is the field of copyright, as well as the personal information of users. Thus, the popular Ascribe service enables many artists and many other representatives of creative professions to confirm their authorship using Blockchain applications. And startup projects such as Civic and UniqWallet enable people to create their digital IDs using the Blockchain. These records cannot be falsified, and they have every chance to replace in the future ordinary identity cards. Naturally, there are a lot of areas for the implementation of Blockchain protocol - from trade in precious metals to the development of energy distribution systems and the holding of presidential elections in a particular state. Knowing how to use Blockchain and main principles of how does Blockchain technology work will provide you with new impressive capabilities.

    How to Invest in Blockchain Technology

    Many people are interested in the question “How to invest in Blockchain technology”? There are 2 ways to invest in Blockchain:
    1. Shares of public companies that use Blockchain technology to implement  their projects,
    2. Blockchain-based crowdfunding platforms.
    The first method is more suitable for large investors who bet on well-known players in the stock market. The second is designed for new startups, which for the most part are not yet known to anyone. In the first case, the profit is almost guaranteed, but it may not be too big. When investing in startups, there are 3 main outcome options for investors:
    • The project does not work in the declared way, ceases to attract sponsors and closes;
    • ICO-project is developing, becoming viable, brings a stable, but small income;
    • A startup grows fast thanks to the promotion, gets sponsors, and participants get superprofits.
    In such a simple way Blockchain explained without too complicated words. A number of users on the Blockchain is growing every day but whom to say thank you?

    Who invented Blockchain technology

    Do you want to know who invented Blockchain technology? Japanese programmer Satoshi Nakamoto is considered to be the creator of certain. However, this statement is not entirely correct. Speaking about the Blockchain and the history of its development, it should be noted that for the first time they started talking about Nakamoto when he introduced the first Bitcoin Blockchain currency.
    At the same time, the technology itself appeared in 2007. Bitcoin entered the global network 2 years later - on January 3, 2009. By this time, Nakamoto had implemented the protocol within which this cryptocurrency works.
    Researchers believe that the Japanese programmer is not the person who created Blockchain technology. He just used solutions developed a decade earlier:
    • The idea of decentralization of currencies;
    • The idea of creating a chain of blocks independent of each other;
    • The mechanism for the proof of completed transactions.
    So opinions on who invented Blockchain differ. However, it doesn’t matter. It’s more important to understand how to implement Blockchain technology and how it works. And along with this, understanding of the huge potential of this system will come, which, quite possibly, will change your life in the near future as well

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