What Is Blockchain Technology?

What is Blockchain technology? It may be gaining momentum, but not many can explain what it truly is. A Blockchain translates into computers communicating with other ones in a P2P network connected via the internet. The network uses a consensus mechanism: each computer needs to agree with all the others about who owns what and which actions have come to pass.                       

Blockchain is a distributed database. This means there are multiple copies of the database stored across multiple computers. When it comes to Bitcoin, there are thousands of computers (as well as satellites) in more than 100 countries storing the Blockchain. The database is decentralized and has operated for 10 years without any downtime.                                                                                

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Technology Behind Bitcoin: Components of the Blockchain System

 

To easily understandable technology behind Bitcoin, it is best to observe it as a combination of old technologies working in a different way. The three main components of a Blockchain are a distributed network comprising a shared ledger, private key cryptography and means of keeping track of the records and transactions performed on the network.

It is this private key cryptography that opens endless opportunities for Blockchain use. Every participant in crypto transactions holds two keys: a public and a private one. The combination of the two allows for generating a secure digital identity reference point (signature), which is a key component of a Blockchain.

The signature is further combined with the component of the distributed network. Thus, a Blockchain consists of a network of individuals who jointly reach a consensus for each transaction (consensus mechanism). Finally, a Blockchain has its own validity rules, which enable the network to operate in a secure way.

The Blockchain technology is far from being deployed to its full potential. Many industries are eagerly keeping track of the developments, expecting disruption at any moment, and hoping to come up with new innovation plans in order to utilize the technology before competitors do. Numerous Blockchain conferences Asia and worldwide are organized to that end, with both startups and large organizations attending them.

Blockchain Technology Tutorial: Bitcoin Transactions

 

Blockchain technology tutorial: why does Bitcoin appear tempting? For one thing, Bitcoin transactions are safer and easier to perform than traditional ones. To make a payment, one simply needs to log in to their wallet and send Bitcoin directly to the recipient’s address.

Before the process can be finalized, it needs to be verified. The network makes certain that the sender has the Bitcoins they are trying to transfer, and that they are not attempting a double transaction. When successfully verified, the transaction is added to the Blockchain. A Blockchain can be, hence, observed as a history of all Bitcoin transactions to have occurred since the Bitcoin was introduced.

Bitcoin Community Asia: Blockchain Use Cases

 

Bitcoin community Asia is keeping an eye on a couple of Bitcoin use cases, some of which are: the IoT, streamlined supply chains, decentralized apps, identity management and smart contracts, and decentralized autonomous organizations.

Making the IoT More Accessible

 

The Internet of Things (IoT) is a connected ecosystem recording, processing and sharing interactions, making it a perfect candidate for blockchain. Scilicet, the Blockchain technology is capable of recording huge amounts of data in a trustless way and of analyzing data points transparently. The identification and verification abilities of the Blockchain make the technology a perfect fit for hosting IoT devices.

Those could be used for improving infrastructure management and public services. For private purposes, IoT devices could be used for improved warehousing and logistics.

First steps have already been made, with the IOTA making its appearance. The IOTA is the first open-source permissionless distributed ledger, built to power the IoT with feeless micro transactions and data integrity for machines.

 

Streamlined Supply Chains

 

Because global commerce has faced an uneven expansion, supply chains have suffered in a number of ways, such as is the case of non-transparent logistics and warehousing. With Blockchain allowing for real-time tracking, the technology may solve a multitude of issues with ease. Some big organizations have already realized this potential. I.e., Walmart has partnered with IBM to work on the Hyperledger Fabric Blockchain, which will help the business track food staples from supplier to shelf.

 

Decentralized Apps

 

One of the greatest benefits that Blockchain renders is the ability to build decentralized applications (dApps) featuring various advantages, including P2P interactions, a trustless protocol based on consensus and greater democratization. Originally developed with the help of the Ethereum ERC-20 chain, dApps have now moved to Qtum.

dApps store transactions are directly on Blockchain’s distributed ledger, making the process more transparent. Qtum’s blockchain integrates Bitcoin security capabilities with the Ethereum Virtual Machine, allowing users to benefit from both Blockchains.

 

Identity Management

 

Identity theft is a phenomenon that needn’t be particularly expanded on. Let us just say that, only in 2017, 2.6bn records were stolen, exposed or have gone missing worldwide, with 69 percent of the misuses being classified as identity theft.

Blockchain can be used to verify identity for added security. There are some examples already. E.g., Civic’s Secure Identity Platform (SIP) uses multi-factor authentication that eliminates usernames and passwords, relying solely on biometric data verified by the Blockchain ledger.

 

Smart Contracts and Decentralized Autonomous Organizations

 

Smart contracts enable Blockchain users to exchange money and assets in a transparent fashion, eliminating the need for a middleman.

Decentralized Autonomous Organizations (DAO) is a complex form of a smart contract that doesn’t involve people. DAO uses complex token governance rules to maximize the benefits of Blockchain’s decentralized organization.

What Is Blockchain Technology, Again?

We believe the question “what is Blockchain technology” has become far simpler now. Future uses for cryptocurrencies are expected to skyrocket, with large portions of industries still being reluctant to jump on the bandwagon. At the moment, the technology is mostly made use of in finance, capital markets, trade and insurance.

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