What is Blockchain?
It’s the backbone of crypto like Bitcoin and Ethereum. Using Blockchain, financial institutions can save billions annually. What exactly is Blockchain and how does it work? Read More >
Blockchain, Definition & Meaning
A digital ledger that records transactions that is not stored in one central location. It’s spread out across a network of computers. The information stored on the ledger is decentralized and can’t be controlled by any single entity. Decentralized digital ledger is known as Blockchain.
Blockchain Simple Example
You and your friends have a poker club and you want to keep track of all the card games you play together. You could write it all down in a pad, but what if someone loses the pad or someone spilled beer on the pad? Blockchain is here to save your vitial information. Once something is written, it can’t be erased or changed. It’s kept in many different places that all your friends can see what’s written.
Blockchain continued
Blockchain is a distributed ledger that records transactions from many computers all over the globe. Registered, prevents further change of them. Development is the process of building a shared, immutable Distributed Ledger Technology (DLT) that records transactions and tracks them inside a network, like medical records, money, sales, property rights, deeds.
History of Blockchain
Stuart Haber & W. Scott Stornetta made the first public announcement of Blockchain technology. They started in 1991 with a crypto secure chain of blocks that prevents changing document timestamps.
The system was created in 1992 that included Merkle trees, this increases performance and allowed accumulation of even more documents on a single block.
Proof of Work, a crypto mechanism, was introduced by a crypto campaign in 2004. Maintaining tokens registered to a reliable server, this helps others in solving the Double Spending Problem.
Satoshi Nakamoto developed the distribution of Blockchains in 2008. He makes it possible to add blocks to the chain without needing them to be signed.
In 2009 Satoshi Nakamotos whitepaper, he explaines how the technology meant that nobody would be in charge of anything while enhancing digital trust.
Management of Supply Chains
Supply chains traceable thanks to Blockchain technology. Walmart, for instance, used Blockchain to automate system for controlling payments and invoices from its 70 different freight providers. Walmart currently uses a Blockchain to track over 25 products from 5 different vendors. This ensures food safety.
Banking & Finance
Banks are becoming more efficient, less expensive thanks to Blockchain technology. J.P. Morgan uses Blockchain technology to handle transactions between globa banks. Transfers made to banks in other global markets. JPMorgan Chase & Co. implemented Blockchain technology for settlements in 2022.
Music Industry & Artists
Royalties paid to musicians are more transparent with Blockchain technology. Crowdsourced data, rankings. Tokens or digital money in the music industry are rewarded to community members. Royalties from streaming are simpler and allows artists to be fairly compensated.
Real Estate & Property
Real estate transactions are more efficient thanks to Blockchain technology. ATLANT uses a Blockchain-based. Real estate is then tokenized, it can be exchanged freely on the blockchain, like stocks on the stock exchange.
Public Blockchain
Ledger system with no restrictions that has permissions is a public Blockchain. The system is transparent and trustless letting anybody to validate the transactions. Blockchains are mostly used for crypto exchanges and mining. Bitcoin Blockchain, is a public Blockchain, uses proof of work to confirm transactions while adding them to the Blockchain.
Private Blockchain
Private Blockchains, is a ledger that allows users to access it. An invitation is their identification that is verified so users can join the Blockchain network. Central authorities control who can access to the private Blockchain with greater levels of anonymity. The usage of central bank digital currencies (CBDCs). CBDC is a countrys fiat currency stored in digital form.
Consortium Blockchain
A Blockchain that is owned by companies is referred called a consortium Blockchain, also known as a federated Blockchain. More than one central authority is in control. The consortium Blockchain makes it easier for Blockchains to work together. A good example of a consortium Blockchain is IBM Food Trust.
Hybrid Blockchain
Hybrid Blockchain is a system that combines public and private Blockchains. Blockchain hybrid structure is programmable. Users of the hybrid Blockchain can make transactions public. Transactions are made public for verification reasons.
Blockchain Components
Blockchain technology consits of components that work with each other to create a decentralized, secure ledger.
Blockchain Components
- Block
- Node
- Ledger
- Wallet
- Action
- Crypto
Block: Collection of transactions that are contained in a block. Data in the block is permanent and uneditable on the Blockchain.
Node: Computers that make up a Blockchain’s network. They approve transactions, like adding new blocks, keeping a copy of the Blockchain and ensuring transactions are valid.
Ledger: Database that contains every transaction. Made of several blocks, containing a transaction. Blocks are connected by a crypto chain.
They are three ledgers
Public ledger, Publicly transparent. Anyone can read or write.
Distributed ledger, Nodes are local copys in the database. Nodes work to preform a job. Like, add blocks to the Blockchain while confirming the action.
Decentralized Ledger, Nodes have control in the ledger. Jobs execution is performed by the nodes.
Wallet, crypto wallet, digital wallet or cryptocurrency wallet, allows tranfer, accepting and storing digital currency. Nodes each have a wallet that use public and private keys while remaining private inside the transaction.
Consensus Mechanism, Element that guarantees integrity while enabling the networks ledger action.
Cryptography, Mathematics, theory, and knowledge of the blockchain.
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