Satoshi Nakamoto, the famous name between the un named(people who created bitcoin), you may have not heard this name, but you may have heard a lot of hype lately caused by him, his paper Bitcoin: A Peer-to-Peer Electronic Cash System was mainly focused on solving the issue of “Transactional Transperency”, and by the way Bitcoin is not Blockchain.
The technique used to store Bitcoins is Blockchain, it has been developed so meticulously that its almost impossible to alter or change. A lot of fortune 500 companies including Google, Facebook, Oracle, Walt Disney, Amazon are looking very excited to implement this technique. (List of such companies could be found here)
The question is why?
Lets understand this in very simple terms (I mean really simple).
- Normally a transaction (of any type) between one party to another party should be validated, now to validate there should be an entity in between which is responsible and trusted. But introducing this third party means it will take some time, it will cost some commission of the third party, its also an extra step in between.
- This would also mean that if the third party is some way compromised as the data is centralised, it can’t be trusted any more and all the data is invalid.
So, Blockchain mitigates the above flaws in following ways
- Its a Decentralised Open ledger, this means every one has one copy of the ledger and all he changes to the ledger is propagated to all others.
- As every one can see the changes it has full transparency which mitigates the requirements of a third party to validate transactions / data
- Because there is no time is consumed for audits and validations it also makes the transactions almost instantaneous.
- Absence of third party also means, this technique is more economical.
- Decentralisation means there is no one source of truth.
The above use case is just one single use of the Blockchain technique. But it can be extended to a lot more verticles as described follows, rememeber the main advantage of Blockchain technique is it ensures data integrity.
- We cannot ignore the fact that our online presence is increasing – including our selfies, regular event photos, even your Govt. Id’s, Block chain can be used to store these kinds of docs as well. But visible to authorised parties only of course. Main things is Blockchain ensures the integrity of the document, that it can’t be altered, which is a basic and very important necessity when it comes to our identities. Its so promising that Dubai is planning to implement Blockchain in all Goverment systems by 2020.
- Records of various researches in fields like Medical, Space, Physics should be stored in places where they can’t be altered, this is where blockchain can help
- Also few Government agencies are taking steps towards storing patents with this technique.
- (and there are lots of other implementations possible…)
Seriously, data can’t be changed ? But how ?
I will not describe the detail of implementation, i will describe more of some reasons why data can’t be altered.
- A data that should to be stored as a block in the chain, has to be verified, when any one in the distributed network wants to do so it will broadcast it.
- Then everyone will get the unverified data, they will all try to create a key called “Proof-of-work”, this is a piece of data which is difficult to produce but easy to verify after any one of them creates this key the data can be called verified and added to the chain of blocks, but generating this Proof-of-work is slow and takes about 10 mins.
- As all the blocks are chained together if any one block is altered all the blocks will become invalid and to validate those blocks as metioned above “Proof-of-work” will have to be generated which is again a very slow process.
- Also even if someone can alter the data in one place as the system is distributed, others will find out this fraud and invalidate the data.
So that’s it for today, Please let us know what do you think about this article, also please note this is how we view blockchain it may differ to you an that’s totally fine. Also Blockchain is evolving so what it is now can’t be valid in the near future.
Please leave a comment below if you have something wandering around your head, may it be something crazy. And let me know what kind of technical articles you would like us to create.
#Blockchain#bitcoin#markettrends#newtechnology#distributedledger Ending with a quoteIf you can define a problem in understandable details, you can find a solution as well.