If you tried to penetrate into the mysterious thing called block network, I would have forgiven you because it was frightened to use the mere opacity of technical jargon that is often used. So before we can figure out what crytpocurrency is and how blockchain technology can change the world, let's talk about what the block network really is.
The simplest way is to block the length of the digital book transaction, not the one for hundreds of years in terms of sales and purchases. The function of the digital library is in fact roughly the same as traditional bookkeeping, as it registers people's debits and credits. This is the basic concept behind the blockchain; the difference is the one who owns the general ledger and who controls the transactions.
For traditional transactions, payment from one person to another includes an intermediary that facilitates the transaction. Suppose Rob wants to give 20 pounds to Melanie. You can get a $ 20 note or cash, or use a bank application to transfer money directly to your bank account. In both cases, a bank is the transaction controlling agent: the funds of Rob must be checked when cash is withdrawn from the cash machine or the application checks the digital transfer. The bank decides whether the transaction will continue. The bank also includes a record of all transactions carried out by Rob and is solely responsible for updating it when Rob pays someone or receives money on his account. In other words, the bank keeps and controls the accountant and everything flows through the bank.
That's a lot of responsibility, so it's important that Rob feels he can trust his bank, or else he's not risking their money with them. You must be sure that the bank will not deceive you, you will not lose your money, will not rob you, and will not disappear from day to day. This demand for trust greatly supported all the major behaviors and aspects of the monolithic financial sector, so much so that even when it was discovered that banks were irresponsible to our money during the 2008 financial crisis, the government (another mediator) to release them and not risk the ultimate fraction of trust if they let go.
Block networks operate from a variety of key aspects: they are fully decentralized. There is no central clearing house like a bank, and there is no central accountant. Instead, the book is distributed over a huge computer network, known as a node, each with a copy of the entire bookkeeper on the appropriate hard drives. These nodes are interconnected through a P2P (peer-to-peer) client that synchronizes data over the nodes' network and ensures that everyone uses the same version at any point in the log.
When entering a new transaction into a block channel, we first encrypt the latest encryption technology. After being encrypted, the transaction is called a block, which is basically the term used for the encrypted group of new transactions. This block is sent (or broadcasted) to the network of computer nodes where nodes check and, as soon as it is verified, are passed over the network to allow the block to be added to the library at the end of the directory on everyone's computer under the list of all previous blocks. This is called a chain, so the technique is called a block channel.
After being endorsed and recorded in the main book, the transaction may be completed. That's how cryptographers like Bitcoin work.
Accountability and elimination of trust
What benefits does this system have in a bank or centralized settlement system? Why would Rob use the normal currency instead of Bitcoin?
The answer is trust. As mentioned earlier, the banking system is critical of Rob trusting in his bank to protect his money and handle it properly. To ensure this, there are enormous regulatory systems in place to control the activities of banks and to be able to achieve their goals. Governments then regulate regulators and create a series of control systems whose sole purpose is to prevent mistakes and bad behavior. In other words, organizations such as the Financial Services Authority exist because banks can not trust themselves. And banks often blame and behave badly, as we have seen too many times. If you have a single source of authority, power is usually abused or abused. Relationship between people and banks is unpleasant and uncertain: we do not really trust them, but we do not feel any more alternatives.
Block network systems do not have to rely on everything. All transactions (or blocks) in the block network are checked by the network nodes before they are placed in the directory, which means that there is no single error or a single approval channel. If a hacker successfully attempted to manipulate the mainstream booklet on a block network, he would have to take millions of computers at a time, which is almost impossible. The hacker would also be unable to shut down the block network as it would need to re-enable each computer in a world-distributed computer network.
The encryption process itself is a key factor. Block networks, such as Bitcoin, deliberately use heavy procedures for their authentication. In Bitcoin, blocks are controlled by nodes, deliberately processing a series of processing and time-consuming calculations, often in the form of puzzles or complex math problems, which means that the check is not immediate and unavailable. Nodes linked to the control of resource blocks can be rewarded with a transaction fee and the newly bribed Bitcoins bounty. This works to encourage people to become nodes (because processing blocks require very powerful computers and plenty of electricity) while managing the currency generating or monetization units. This is called mining because it requires a significant amount of effort (a computer, in this case) to produce new goods. This also means that transactions are verified in the most independent way, regardless of whether they are a state-controlled organization such as the FSA.
The decentralized, democratic and extremely safe nature of block length means that they can operate without regulation (self-regulating), governmental or other transparent intermediaries. They work because people do not trust each other, not in spite of it.
Let this sink's significance for a while, and the excitement around the block knot starts to make sense.
Where things are really interesting, the use of a block bridge beyond cryptographic values such as Bitcoin. Given that one of the principles of the block network system is the secure, independent control of the transaction, other ways of conceiving it are likely to be valuable in this type of process. Not surprisingly, many of these applications are in use or in development. Some of the best ones:
- Smart Contracts (Ethereum): Probably the most exciting blockchain development after Bitcoin, intelligent contracts are blocks that contain a code that must be executed to complete the contract. The code can be anything while a computer can perform, but simply means that blockchain technology (with independent control, mistrusted architecture and security) can create a kind of deposit system for any transaction. For example, if you are a web designer, you can create a contract to check if a new client's website is launched and automatically issue you the basics as soon as it's done. No more persecution or billing. Intelligent contracts are also used to demonstrate ownership of a device, such as property or art. The possibility of reducing fraud is enormous.
- Cloud Cloud (Storj): cloud computing revolutionized the bandwidth and triggered Big Data, which in turn launched the new AI revolution. But most cloud-based systems can be run on servers hosted on single-host server farms owned by a single entity (Amazon, Rackspace, Google, etc.). This identifies the same problems as the banking system, as the data is controlled by a single, opaque organization that represents a single defect site. Allocating data on a block network completely eliminates trust issues and promises to increase reliability as it is much more difficult to run the block network.
- Digital Identification (ShoCard): Today's two major problems are theft and data protection. Huge, centralized services such as Facebook's wealth of data companies and the efforts of the various developed governments to store their digital data in their central database on their citizens is a terrifying possibility of abusing personal data. Blockchain technology is a potential solution for encrypting a key data packet encrypted block that the block network can verify if you have to prove your identity. Such applications include passports and IDs. cards to other areas, such as password replacement.
- Digital Voting: It is extremely relevant to the investigation of the impact of Russia on the recent US elections, digital voting has long been believed to be unreliable and extremely vulnerable to manipulation. Blockchain technology allows you to verify that voters' votes have been successfully sent to keep their anonymity. It promises not only to reduce fraud, but also to increase voter turnout as people will be able to vote on their mobile phones.
Block network technology is still very young and most applications are far from common use. Even Bitcoin, the most widely used block network platform, is exposed to huge volatility, which indicates its relative new status. However, the ability to solve the block network to address some of today's problems makes it extremely exciting and tempting technology. I certainly look.
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