A Blockchain is an innovative approach towards a completely digitalized, decentralized still anonymous ledger system. Initially, it was designed to regulate transactions for the digital currency Bitcoin as it lets digital information be distributed (decentralized) and secures it uniquely. However, the technology that lies in the background has been proven extremely useful in far more applications than this.
In simple terms, Blockchain is a distributed ledger of similar information records called blocks. Growing permanently, it has a large database and all the blocks are linked by cryptography. The information that Blockchain records maintain, and hold is completely secured and anonymous even though it is a shared and continuously updated database. What is improved and innovative with the approach of this technology is the security, autonomy, automation, and anonymity of the whole digitalized ledger system i.e. the database that is gathered is not stored or centralized in one single location. Millions of computers on the chain host every input so there are several copies of the ledger and consequently, it will take an unimaginable amount of computing power to hack into the chain and corrupt the records. Practically, it is an impossible mission to perform a hack and severely corrupt the database of the blockchain system.
This publishing will give you insights and cover everything you need to know about Blockchain technology.
History of Blockchain
In a 1982 dissertation named: “Computer Systems Established, Maintained, and Trusted by Mutually Suspicious Groups”, the Cryptographer David Chaum first suggested a blockchain featured protocol. Almost a decade late, in 1991, Stuart Haber and W. Scott Stornetta published additional work on a cryptographically secured chain of blocks. Based on document timestamps that are immutable after they have been created they’ve set the foundation of the best innovation in Blockchain. Later on, in 1992, Merkle trees were included in the design by Haber, Stornetta, and Dave Bayer, improving the underlying efficiency and allowing several document certificates to be collected into one block.
Under the pseudonym Satoshi Nakamoto, in 2008, the first blockchain was conceptualized by a person or a group of people leaving the world speechless under the veil of what is coming next. The design was consequently improved with the use of a Hashcash-like method to timestamp blocks without the need to be signed by a trusted party and introducing measures of difficulty to regulate the frequency with which blocks are created and added to the chain. This design was established by Nakamoto one year later to serve as a core component of the cryptocurrency bitcoin, and as the public ledger for all transactions on the network.
Bitcoin blockchain file size containing records of all transactions that have occurred on the network over the years:
-August 2014 – 20 GB;
-In January 2015 – 30 GB;
-From January 2016 to January 2017 – 50 GB to 100 GB;
-Early 2020The ledger size had exceeded 200 GiB;
-August 2021- more than 30 GB.
The file sizes of the Blockchain show the exponential growth and adoption of the technology from the very start and how it changed and developed up to this point today.
Within the financial services in 2016, according to Accenture, an application of the diffusion of innovations theory, blockchains attained a 13.5% adoption rate, in such a way reaching the early adopter’s phase. The Global Blockchain Forum was created in 2016 by the industry trade groups that joined to create and drive the initiative of the Chamber of Digital Commerce.
Back in 2018, only 1% of CIOs reported any kind of blockchain adoption within their organizations, and only 8% of CIOs were in the short-term “planning or [looking at] active experimentation with blockchain”. Just one year later in 2019, 5% of CIOs considered the technology to be a ‘game-changer for their business, Gartner reported which initiated a completely new approach and view to the topic.
What Is Blockchain, and How Does It Work?
When discovering more about Blockchain, the most frequent definition that you will come across goes like this: “blockchain is a decentralized, distributed, public ledger.” As a genius invention, The Blockchain will find various applications and enter many domains of our modern world and everyday life, thus driving many changes and transforming the world as we know it from the bottom up.
As an alternative to the traditional Bitcoin cryptocurrency transfer intermediary, Blockchain is an open-source technology that offers a completely new collective ecosystem verification that provides a flawless degree of traceability, security, and speed.
Blockchain technology has created the basis for a new type of Internet by allowing digital information to be distributed but not copied. Even though it was Initially designed for the digital currency Bitcoin, blockchain and the tech community have found many other potential uses.
If this technology is so advanced is it extremely complex to explain and understand its underlying structure, and why is it called “blockchain?”
The term Blockchain is composed of two words “block” and “chain” to describe how it is structured – multiple chains of blocks, where digital information (“block”) is stored on a public database (“chain”).
Another way to look at Blockchain is to see it as a timestamp-based series of invariable records of data stored and distributed within the network securely, anonymously, and automatically. Literally, it is a pack of computers not owned by any individual being.
Cryptographic principles (the chain) connects and restricts these blocks of data making a unique, structured, and interrelated scheme of data.
Furthermore, the blockchain network is not reliant on a central authority. On the contrary, it is a shared and immutable ledger with the information inside being open for anyone and everyone to cognize it.
Consequently, all data that is gathered and created on the Blockchain is completely transparent, and everyone involved is in charge of their activity.
With the Blockchain, the transmission of information from point A to point B happens in a fully automated and secure manner making it more simplified and self-sustained.
How does the process actually work?
When a transaction happens the process is initiated by creating a block.
This block is certified by thousands perhaps even millions of computers distributed across the network and then the verified block is added to a chain store across the web, generating a unique record with a specific history.
That is why falsifying a record is almost impossible and it would mean forging the entire chain in millions of cases. Practically speaking it is “mission impossible”. Usually, Bitcoin uses this model for money transactions, but it can also be deployed in many other ways.
Blockchain’s blocks are to be seen as fractals as they are built of digital fractions of information. In particular, they consist out of three parts:
- Transaction information: date, time, transaction amount, and currency.
- Information about the personal data of the transactors
- Unique block code information to make a distinction between various blocks.
Blockchain Unique Features
There are three main purposes and applications that enjoy high-level incorporations about Blockchain:
Existing anonymously – Blockchain technology offers the anonymity that was a long pursuit in the traditional banking world. The anonymity is possible thanks to the nodes that act simply as points in a private network, and Blockchain acts similarly to a distributed book. Many businesses, financial institutions are now rushing towards the implementation of Blockchain, and in particular, feel pressured to show regulatory compliance. Precise solutions like Blockchain can be the key building block to reduce compliance costs.
More comprehensive than finance – Traceability and visibility as key factors for secure transactions are Blockchain’s “cup of tea”, applied to any multi-step transaction where managing and signing of contracts and forecasting of product audits are conducted in a specific, innovative and automated way. Because of these unique features Blockchain can also be used for voting platforms, titles, and case management, and the list will continuously increase as new developments and ideas become available.
Exponential growth – The Blockchain network and popularity allowing the managing of public and private Blockchain’s usage through an ecosystem where enterprises, customers, and suppliers can collaborate in a secure, verified, and virtual way.
Failure resistant: The Blockchain doesn’t depend on human calculations and therefore it is a kind of failure and fraud-resistant. It has a precise scheme of organization, so, accidental failures are almost completely out of the option.
Assets And Properties Controlled By The Users: Assets and Properties with the decentralization feature are now in almost complete control of the users. To rely on any third party to maintain their assets is now a thing of the past. Everything can be done simultaneously and fast by the users themselves.
Almost Impossible To Hack: Any malicious attack is harmless to the Blockchain system thanks to its decentralized structure the key feature of blockchain technology, it is built to stand strong as a stronghold for many years to come. It would be a highly expensive and meticulous process to attempt to hack the system and even harder to corrupt it in a certain way.
No Third-Party: Decentralization is the innovation here and is responsible for many unique features here mentioned and as well as the core and nature of the technology, making it also not reliant on third-party companies, and therefore no added risk.
Fraud Resistant: Algorithms drive the whole system, that is why there is no chance for people to scam you out of anything. No one can utilize blockchain for personal gains.
Highly Transparent: Transparent profile of every participant and every change on the blockchain is viewable.
Why Blockchain Drives Massive Debates Within The Business Community?
Over the last 5-10 years, we have seen massive waves surrounding the Blockchain approach and some analysts predict and expect that the technology will transform the online world ten times more than the Internet did. What is more interesting is that it has a wide range of applications and purposes that will drive major shifts in the economy and the business world.
One striking example that supports this is the approach of the football club Juventus. The incorporation of Blockchain technology for their fans in a form of token called “Juventus Official Fan Token”.
Socios.com developed the token, organizing the blockchain model as follows:
Club’s fans can interact through mobile voting, and a surveying platform that allows the voices of the fans to be heard and contribute in a certain way to their favorite team, thus creating a more close and personal connection between the club and its supporters. The token is already purchasable through an innovative scheme known as FTO (Fan Token Offering).
With this Juventus example, investors become engaged on multiple levels, and this model can be used in different domains.
Another interesting example which you can read more about is our publishing South Korean Telecom Giant KT Corp Will Use Blockchain To Fight Against Carbon Emissions.
Over the last decade, investors got familiar with the technology, and it still surprises with its efficiency, wide domains of application, and nevertheless, it is fraud-resistance that would probably dramatically shift the way we do banking, economics, exchanges, and transactions, a perfect stake to poke any business community.
The 21 century would be a time of technological advancements, adoptions, and transformations that will create a completely new unfamiliar world for the traditional person.
At this time it is a key factor to follow and remain up to date about everything that is happening and hyped about to stay on top of the food chain in terms of knowledge skills and finances.
Blockchain is already heralding a new era in the world of finance and business. It is up to us to get to know it up close and stay tuned for further updates.
It is possible to imagine the future, but almost completely impossible to know how it will unveil the new technologies and what kind of applications they will be best suited for.
Blockchain will be the new “Internet Revolution” that will shift everything we know multifold.
With blockchain, many businesses and project will find their new innovative approach of fulfilling their aims in a secure, anonymous, automated, and self-sustained manner.
Stay tuned on wiki Cryptogoldie to discover the transformative revolutions of our era that follow.