In the year 2017 we saw an explosive growth in the cryptocurrency market, and now crypto coins are getting a lot of attention. However, cryptocurrency is just one instance of the Blockchain technology which will radically transform the world. Few people know what this technology is and how it works. In this article, we going to talk about exactly that.
The Blockchain technology concept was invented by Satoshi Nakamoto, but nobody knows who that is. The technology was implemented in 2009 as the foundation of the Bitcoin cryptocurrency which acts as a transaction registry. Bitcoin was the first currency to solve the problem of double payments without resorting to a central authority.
Freedom and security of payments
Information is distributed within a global computer network. Access to the registry is granted to all participants. The registry is maintained by a united community of users.
Digital signatures form blocks, the blocks form chains as the result of complex mathematical calculations. Each block contains a time mark and a path to the previous block. Subsequent blocks are added to the end of the chain. The technology was designed as a security and reliability element even when there is no trust between parties.
Computers in the network participate in encrypting information (hashing). In order for a block to get a unique digital signature, each computer has to come to the same calculation result. After a new block is created and the registry is updated the chain can’t be edited, therefore old entries can’t be counterfeited, and only new ones can be added.
Information is encrypted in the Blockchain
Encryption allows users to make changes only to those partitions of the chain that are accessible to them. To prevent manipulations, security protocols are used, two of the most prevalent are Proof-of-Work and Proof-of-Stake. The database is updated for all users at the same exact time.
Information distribution rules out the issue of hacking since the latter would require total control of copies of the database on all computers in the network.
The Blockchain can securely encrypt personal data. If a document or a transaction were edited, they will be considered new entries, not edited copies of old entries.
Blockchain is the king of technology
Analytics company CB Insights published its own take on the application of this technology in the following fields:
Banking—for secure storage and exchange of assets. Organizations could cut $20 million on staff.
Payments and transfers—for boosting quality and speed of infrastructure as well as getting rid of commissions.
Legal—for ensuring inviolability of agreements, certificates and verifying their authenticity.
Automation—for automating agreements without human involvement.
Cybersecurity—for safe data transfer inside the secure network.
Education—for ensuring authenticity of documentation, certificates, diplomas, exam results, etc.
Voting—for organizing all kinds of voting procedures and ensuring integrity of elections.
Trading—for organizing systems of purchasing, selling and renting of property. The technology helps track digital assets, verify their authenticity and not allow copying without permissions.
This list of possible uses of this technology is far from being conclusive since it is good for storing any kinds of digital information.
Fields of application
For example, Ascribe helps confirm authorship through a blockchain. Civic and UniquID Wallet help people create digital unforgeable IDs through a blockchain and biometrics.
It has huge potential. Just like with the internet, it will shape our civilization. When loans are displayed in a blockchain, fraudulent loans will have no place in it. Holes inside banks will be impossible to hide, thus there will be no unexpected bankruptcies. Mortgage and car loan scams will be unheard of, people will be able to buy property without the risk of being duped. State-provided services, document issuance, driving licenses, and certificates will not be rife with bureaucracy. People will forget about slow interbank transfers.
Bright development prospects
Currencies based on the Blockchain technology are growing in price and popularity. You can buy and sell them for fiat money (dollars and euros) on electronic currency exchangers. In order to find a favorable exchange rate, you’ll need an exchanger monitor, such as OKchanger.
For example, in order to buy bitcoins with PayPal, go to the monitor’s website and select PayPal USD and BTC in the table on the left:
PayPal USD—BTC exchangers
Having selected a service and clicked on its name, you’ll land on its website where you are supposed to follow the instructions to complete the transaction.