The blockchain in 2019 is included in the compulsory dictionary of every educated person. And it does not matter how old you are, what your education is and what your relationship is with “this is your internet”. This is because the blockchain technology underlies cryptocurrencies and is not only a prerequisite for their existence, but also many more new products of the future.
Blockchain (English block – block, chain – chain) – a distributed database, built on the principle of a chain of blocks. Its main feature is that the information is not stored on the central server, but on many devices. Thus, there is no database owner, and anyone who has downloaded a network node (and you can download it just from the official site) becomes one of the “custodians” of the database. Such a system is very difficult to turn off or spoil.
The people involved in the system use computers to store records that other participants send. Records are stored in chronological order in blocks. Blockchain uses cryptography to protect entries from tampering and changes.
Blockchain for cryptocurrency
The first effective use of the blockchain is cryptocurrency, which can be sent to anyone, anytime. The main feature of cryptocurrency is that it does not need banks to conduct transactions, instead people around the world are helping to move digital assets, confirming other transactions. For this, they receive a small reward in the form of commissions and generated new coins.
When registering a cryptocurrency wallet, you will receive 2 keys – one public and the other private.
The public key is your address, like a bank card number. You can publish it on your blog, on the website, on a business card to collect donations or get paid for your services. At this address you can determine how much money is on it and what transactions have been carried out.
The private key is a kind of password to your assets, without it you will not be able to get access to transfer funds to other wallets. The private key must be kept completely secret, its presence is a necessary and sufficient factor for transferring funds to other addresses.
Infographics: How blockchain works when transferring transactions
You send a transaction from your wallet.
2. An application for a transaction is sent to neighboring nodes that collect such applications and encrypt them for processing in a block. The higher the commission, the higher the priority of your transaction.
3. A node with the most appropriate (matching principles in each cryptocurrency is its own) by the block-contender receives an award from commissions and new coins.
4️. The transaction block complements the existing blockchain. Now the transfer is not just fulfilled, but also to change the data, to return it, it is already impossible to delete it.
In Aeneas, the average block size is 240 Kb, which is 40 times smaller than Bitcoin with the same amount of information. Total: the chain is easier, and transactions are faster.
Financial sphere is not the only possibility of using technology. Businesses are looking for opportunities to implement distributed registries in order to facilitate work with security requirements, automate control of supply chains and build full-fledged customer loyalty services,
From favorite examples of application – of course political implementation. After all, this means a fair and open vote with the ability to instantly analyze the results of each site owner. No violations at the polls, voting from home and online tracking without spending money on interpol.
Crowdfunding, or fundraising by startups and existing businesses to expand the market and areas of work – did you try to register with a kickstarter or other similar services? The difficulty of using these platforms and the almost inability to get there for non-residents of the United States is a huge obstacle for promising projects in obtaining investment. In this case, you can publish your public key directly on the site and hold a fundraiser in cryptocurrency.
Encryption of personal data is a big pain for companies that store them and users. From simple examples there is a medical field where a doctor can get your card on the blockchain and a certain specialist will get access to limited information about you if necessary.
Blockchain is a technology created for the convenience of users. At the same time, the problems that arise when introducing it into existing business models are sufficient for large companies to think about investments and evaluate their effectiveness. Therefore, there are new projects designed to build successful businesses in the era of the fourth industrial revolution.
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