What is Blockchain Technology?

"The practical consequence of [... is ...] for the first time, a way for one Internet user to transfer a unique piece of digital property to another Internet user, so that transfers are guaranteed to be safe and secure, everyone knows that the transfer has occurred, and not anyone can oppose the validity of the transfer. The consequences of this breakthrough are hard to overstate. "

- Marc Andreessen

From roaming heights, the blockchain may not look different from the things you know, Wikipedia said.

With the blockchain, many people can write entries into information records, and the user community can control how information records are changed and updated. Likewise, Wikipedia entries are not products from one publisher. No one controls information.

However, down to the surface, the difference that makes blockchain technology clearer. While both run on distributed networks (internet), Wikipedia is built into the World Wide Web (WWW) using a client-server network model.

Users (clients) with permission associated with their accounts can change Wikipedia entries stored on a centralized server.

Every time a user accesses the Wikipedia page, they will get the latest version of the 'master copy' from the Wikipedia entry. Database controls remain with Wikipedia administrators that allow access and permission to be managed by central authorities.

Wikipedia's digital digital bones are similar to the highly protected and centralized databases that governments or banks or insurance companies currently hold. Centralized database control lies with the owner, including management of updates, access, and protection against cyber threats.

The distributed database created by blockchain technology has a digital backbone that is fundamentally different. This is also the most different and important feature of blockchain technology.

'Copy master' Wikipedia is edited on the server and all users see the new version. In the case of blockchain, each node in the network reaches the same conclusion, each updating records independently, with the most popular records being de-facto official records in lieu of a master copy.

Transactions are broadcast, and each node makes an updated version of their own event.

This difference makes blockchain technology very useful - It is an innovation in the registration and distribution of information that eliminates the need for trusted parties to facilitate digital relations.

However, blockchain technology, however, is not new technology.

Instead, this is a combination of proven technology that is applied in new ways. It was a special orchestration of three technologies (Internet, private key cryptography and protocols that regulate incentives) that made the idea of ​​bitcoin maker Satoshi Nakamoto so useful.

The result is a system for digital interactions that does not require a trusted third party. The job of securing digital relations is implied - supplied by an elegant, simple, yet powerful network architecture of the blockchain technology itself.

Defines digital trust
Trust is a risk assessment between various parties, and in the digital world, determining trust often leads to authentication (authentication) and proof of permission (authorization).

Simply put, we want to know, "Do you like what you say?" And "Do you have to do what you want to do?"

In the case of blockchain technology, private key cryptography provides a powerful ownership tool that meets authentication requirements. Private key ownership is ownership. It also saves a person from having to share more personal information than is needed for exchange, exposing them to hackers.

Authentication is not enough. Authorization - having enough money, broadcasting the right type of transaction, etc. - requires a peer-to-peer network that is distributed as a starting point. Distributed networks reduce the risk of centralized corruption or failure.

This distributed network must also be committed to recording and network transaction security. Transaction authorization is the result of all networks that implement the rules they designed (the blockchain protocol).

Authentication and authorization provided in this way allows interaction in the digital world without relying on trust (expensive). Today, entrepreneurs in industries around the world have been awakened by the implications of this development - new and powerful digital relations that may occur. Blockchain technology is often described as the backbone of the transaction layer for the Internet, the foundation of Internet of Value.

In fact, the idea that cryptographic keys and joint ledgers can provide incentives for users to secure and formalize digital relations has made the imagination wild. Everyone from government to IT companies to banks is trying to build this layer of transactions.

Authentication and authorization, important for digital transactions, are defined as a result of blockchain technology configuration.

The idea can be applied to any need for a credible record system.
Powered by Blogger