With the advent of the internet, we were promised an age of decentralised freedom. In reality, however, we are still dependent on global and centralised authorities. Many of the processes that govern our global financial system and the world in general are at risk of being compromised by human error on the part of the central authorities. Blockchain technology is designed to change this.
The revolutionary thing about blockchain is that all processes are carried out not on one computer, but on several computers at the same time. Blockchain technology is secure and robust, making it the optimal storage and processing location for sensitive information.
A blockchain is a decentralised database that is protected against manipulation.
Blockchains are a groundbreaking system that ensures mutual trust and collective consensus.
Cryptocurrencies like Bitcoin is just one of many applications of blockchain.
Blockchains can be used for contracts, digital identities, logistics and much more
At its most basic, a blockchain is a list of transactions that anyone can view and verify. For example, the Bitcoin blockchain records every transaction in which Bitcoin is sent or received. Cryptocurrencies and the blockchain technology on which they are built allow assets to be transferred online without the need for an intermediary such as a bank or credit card company.
Practically all cryptocurrencies, including Bitcoin, Ethereum, Bitcoin Cash and Litecoin, are secured via blockchain networks.
Recording transactions on the blockchain is essential for most cryptocurrencies, as it enables secure payments between people without them knowing about each other or needing a bank.
Because these networks use encryption methods, payments made via blockchain are more secure than traditional debit/credit card transactions (very low risk of theft of sensitive information).
The various blockchain models
Public blockchain (used by BTC, for example)
The transaction database is public and can be accessed by anyone. There is complete transparency. The verification and integration of transactions into the blockchain is carried out by a natural person, the ‘miners’. These are computer geeks equipped with powerful computer equipment to encrypt data. There are thousands of miners worldwide who are paid for the fastest block encryption. There is complete decentralisation, anyone can check the validity of the chain.
Blockchain consortium
In contrast to a public blockchain, the data encryption is not carried out by a natural person, but by several trusted third parties (e.g. a financial institution). This model is therefore only partially decentralised. Access to the database is open to everyone if the trusted parties decide so. Otherwise, access is restricted to the participants of the blockchain.
Private blockchain
This is a centralised model. The data is stored and encrypted by a single entity. This entity must be recognised as a trusted third party. Access to the blockchain can be open to everyone or limited to participants.
Your advantages of using blockchain technology:
Accessibility: The transactions recorded in the blockchain are visible to everyone if the blockchain is public. All participants then have access to the database.
Security: Once a transaction has been recorded in the blockchain, it cannot be changed.
Low cost: the blockchain does not require a large number of intermediaries. The only intermediary is the encryption authority.
Blockchain is an open-source technology, its code is provided free of charge, it does not belong to anyone and can be used by anyone. With a public model like Bitcoin, there is complete transparency. Other cryptocurrencies that compete with Bitcoin were created later using the same code.
Want to learn more about this technology?
Explore the courses at Cryptofarm.
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