This idea was first embodied at the beginning of 1990-es. Enthusiasts attempted of creation a safe mechanism — a progression of recordings of bits of information, every one linked to the previous one. The last recording in that line contains memory of the whole line.
Later, in 17 years, Satoshi Nakamato comprehended the allocated block-chain. It contained a safe storage of exchanging-operations of data, used a peer-to-peer net to chronicle and affirm every operation, and users could manage it on a self-sufficiency basis without a centralized control. That grew to be the basis of Bitcoin. So, the block-chain known today was created together with the cryptocurrency.
Look into the way the block-chain idea function? In our blockchain technology review we will see the following:
- Block-chain preserves a recording of operations with data— there is a term for such a recording a “ledger”, each operation – a “transaction“. Every checked operation is attached to the ledger. That makes a “block”.
- An allocated system to confirm each operation is used — a peer-to-peer net of nodules.
- After signing and verifying, this new operation is attached to the chain and it will not be possible to changed it.
We will begin explaining the notion of the tern “key”. This crypto-key provides you with an original identification. These instruments are called the Private-Keys and Public-Keys, these work as a team to provide the user with a virtual inscription.
The Public-key is the way allowing other people to recognize each other. The Private-key arms its user the ability to sign virtually, that is to sanction various operations.
Virtually, that presents your money-bag. While the private key allows to sanction all necessary operations with the virtual belongings, for example cryptocurrencies. Safety of the private-key is extremely important — if someone would have other’s private-key he could enter into accessing to all virtual actives linked to that public-key!
Be the operation successful a person empowers it with the signature. Here are an example of such a transaction: “Alice is about to send Bob some quantity Bitcoins”.
What we need for a successful operation?
- The address of the sender (public-key).
- A virtual inscription that uses public-key together with private-key of Alice.
- This information is linked with the ledger from the block-chain, together with a time mark and an original ID numeral.
- Operation is transmitted to a P-to-P net of nodules — which are, in reality, different numeric personalities which recognize the operation was proceeded, then join into the ledger.
Every operation in the ledger contains the same information: a virtual inscription, a public-key,a time mark, and an original ID. All the transactions are connected, and in case someone goes a step backwards in the book, they could find out the fact of Steven sending Alice 1.2 Bitcoins before. If they go further, an operation more, they will probably see Michael sending Steven 0.5 Bitcoins earlier.
How can you be sure it’s secure?
Crypto-currencies are anonymous thanks to the public-key is only an accidental chain of figures and signs — it’s not like you practically sign something mentioning name and surname or any other information. A public-key never reveals identification data of a real person. More than that, you can also create as many keys as you want and have many cryptocurrency wallets. But look out! Some other ways of identifying could exist, for example, by monitoring your shopping patterns.
Block-chain became a synthesis of reputed schemes viewed from a new angle. The invention was so productive and valuable thanks to certain arrangement of three work-frames: the World Wide Web, concept of private-key and protocols governing web.
Those were summarized into a formation for virtual operations that doesn’t require trustworthy third participant. Block-chain work-frame makes the whole process of guarantying virtual communication hidden. It has a delicate, uncomplicated, but still reliable grid structure.
Centralized or not?
Block-chain fans will proudly tell about its decentralization. The idea is very appealing because if there is no central control – there is no censorship, manipulations, or corrupt practices.
As the technology utilizes a peer-to-peer network, replicas of the ledger are kept in multiple different places. It can be damaged only in an unrealistic case someone succeeds in tracing each path (“Bitcoin” has more than 36,000 nodules inside its net). Thanks to a huge number of autonomous nodules tracing the ledger, it’s impossible to modify the item in a dishonest way because other participants would never accept the operation and attache it with the ledger.
That is the reason for the Block-chain technology being accepted by various spheres of human activity. We can find its trace in: Finance, Smart Contracts, Insurance, Banking, Energy Sector, ‘Knowing Your Customer’ (KYC) and Anti-Money Laundering (AML) services, Healthcare, Real Estate, Government, even music.
Can it be that good?
Well, there are always downsides in any system made by humans.
This technology is not that easy to grasp. If you don’t have technical education the process can be quite tricky at first. All those IT terms and special notions can confuse or frighten possible users.
Nevertheless, we see that it’s rapidly growing more popular and is useful in various spheres of human activity and, thanks to it, it’s becoming the mainstream. In case you are interested, now you have much more information that helps you to study it out. All this helps the topic to be more reachable.
Many innovators, customers, and admirers are sure that reviews of blockchain technology are very useful. All of them are eager to witness the success of the process. We would advise you to watch for newest achievements!