Blockchain, also known as Distributed Ledger Technology (DLT), uses decentralization and cryptographic hashing to make the history of any digital asset unalterable and visible.
A Google Doc is a basic comparison for understanding blockchain technology. When we make a document and share it with a group of individuals, it is disseminated rather than copied or transferred. This establishes a decentralised distribution network in which everyone has simultaneous access to the document. No one is locked out while waiting for changes from another party, and all changes to the document are logged in real-time, making alterations entirely transparent.
Naturally, a blockchain is more complex than a Google Doc, but the example is useful because it highlights three key concepts:
HOW TO UNDERSTAND BLOCKCHAIN? – A QUICK OVERVIEW
• A blockchain is a database that stores encrypted blocks of data, then chains them together to form a chronological single-source-of-truth for the data.
• Digital assets are distributed instead than copied or transferred, creating an immutable record of an asset.
As a promising and innovative technology, blockchain reduces risk, eliminates fraud, and offers transparency in a scalable method for a wide range of applications, among others.
BLOCKCHAIN’S HISTORY
A YOUNG TECHNOLOGY, BLOCKCHAIN ALREADY HAS A LONG AND FASCINATING HISTORY. AN OVERVIEW OF SOME OF THE MOST IMPORTANT AND PROMINENT EVENTS IN THE HISTORY AND DEVELOPMENT OF BLOCKCHAIN TECHNOLOGY IS PROVIDED WITHIN.
“BITCOIN: A PEER-TO-PEER ELECTRONIC CASH SYSTEM” IS PUBLISHED BY SATOSHI NAKAMOTO, A PSEUDONYM FOR A PERSON OR GROUP.
2009
COMPUTER SCIENTIST HAL FINNEY AND SATOSHI NAKAMOTO MAKE THE FIRST SUCCESSFUL BITCOIN (BTC) TRANSACTION.
2010
BITCOIN IS USED FOR THE FIRST TIME TO PURCHASE TWO PAPA JOHN’S PIZZAS BY FLORIDA-BASED PROGRAMMER LASZLO HANYCEZ. A TOTAL OF 10,000 BITCOINS WERE SENT BY HANYCEZ, WHICH AT THE TIME WAS WORTH AROUND $65. • IT’S NOW WORTH $80 MILLION. BITCOIN HAS A MARKET CAPITALIZATION OF MORE THAN $1 MILLION.
IN 2011, THE VALUE OF ONE BITCOIN WAS EQUAL TO ONE US DOLLAR.
EFF, WIKILEAKS AND OTHER ORGANISATIONS BEGIN ACCEPTING BITCOIN AS A CONTRIBUTION METHOD.
2012
• BLOCKCHAIN AND CRYPTOCURRENCIES ARE FEATURED IN FAMOUS TELEVISION SERIES LIKE THE GOOD WIFE, INTEGRATING BLOCKCHAIN INTO POP CULTURE.
THERE WERE MORE THAN $1 BILLION IN BITCOINS ON THE OPEN MARKET IN 2013.
• BITCOIN ACHIEVED A NEW HIGH OF $100/BTC.
IF YOU’RE INTERESTED IN LEARNING MORE ABOUT THE EHTHERIUM PROJECT, CHECK OUT THIS ARTICLE PUBLISHED BY BUTERIN (E.G., SMART CONTRACTS).
ZYNGA, THE D LAS VEGAS HOTEL, AND OVERSTOCK.COM ALL ACCEPT BITCOIN AS PAYMENT IN 2014.
IN AN INITIAL COIN OFFERING (ICO), BUTERIN’S ETHEREUM PROJECT RAISED OVER $18 MILLION IN BITCOIN AND OPENED UP NEW POSSIBILITIES FOR BLOCKCHAIN.
IT WAS FOUNDED BY MORE THAN 200 BLOCKCHAIN COMPANIES TO FIND INNOVATIVE WAYS BLOCKCHAIN TECHNOLOGY MAY BE UTILISED.
IN ADDITION, PAYPAL HAS ANNOUNCED THAT IT WOULD INTEGRATE BITCOIN.
MERCHANTS ACCEPTING BITCOIN HAVE SURPASSED 100,000 IN
2015
A COLLABORATION BETWEEN THE NASDAQ AND THE SAN FRANCISCO-BASED BLOCKCHAIN STARTUP CHAIN AIMS AT EVALUATING THE TECHNOLOGY’S SUITABILITY FOR TRADING PRIVATE COMPANY SHARES.
A BLOCKCHAIN STRATEGY FOR CLOUD-BASED BUSINESS SOLUTIONS IS UNVEILED BY IBM.
• CRYPTOCURRENCY SUCH AS BLOCKCHAIN AND CRYPTOCURRENCIES ARE RECOGNISED BY THE JAPANESE GOVERNMENT.
2017
• FOR THE FIRST TIME, BITCOIN HITS A PRICE OF $1,000/BTC.
MARKET CAPITALIZATION OF CRYPTOCURRENCIES SURPASSES $150 BILLION.
A VOTE OF CONFIDENCE FROM WALL STREET IS GIVEN TO THE LEDGER SYSTEM BY JP MORGAN CEO JAMIE DIMON.
CRYPTOCURRENCY BITCOIN HITS A RECORD HIGH OF $19,783.21/BTC.
BY 2020, THE DUBAI ADMINISTRATION PLANS TO USE BLOCKCHAIN TECHNOLOGY TO RUN THE CITY’S GOVERNMENT.
2018
THERE ARE SUGGESTIONS THAT FACEBOOK MAY LAUNCH ITS OWN CRYPTOCURRENCY AS WELL AS COMMITTING TO THE FORMATION OF A BLOCKCHAIN ORGANISATION.
CITI AND BARCLAYS JOIN IBM IN DEVELOPING A BLOCKCHAIN-BASED BANKING INFRASTRUCTURE.
2019
CHINE’S PRESIDENT JI XINPING OPENLY EMBRACED BLOCKCHAIN AS CHINA’S CENTRAL BANK SAID IT IS WORKING ON ITS OWN COIN.
THE CEO OF TWITTER AND SQUARE HAS ANNOUNCED THAT SQUARE WILL BE HIRING BLOCKCHAIN DEVELOPERS TO WORK ON THE COMPANY’S FUTURE CRYPTO AMBITIONS.
BLOOMBERG REPORTS THAT BAKKT, A DIGITAL WALLET STARTUP, WILL BE LAUNCHED BY THE NEW YORK STOCK EXCHANGE IN 2020.
WHEN BITCOIN REACHES $30,000 BY 2020, PAYPAL WILL ENABLE USERS TO PURCHASE, SELL, AND STORE CRYPTOCURRENCIES “SAND DOLLAR” IS THE OFFICIAL MONEY OF THE BAHAMAS, WHICH IS THE WORLD’S FIRST DIGITAL CURRENCY. DUE TO ITS ABILITY TO SECURELY STORE RESEARCH DATA AND PATIENT INFORMATION, BLOCKCHAIN TECHNOLOGY BECOMES A CRUCIAL ACTOR IN COVID-19’S FIGHT AGAINST THE VIRUS
What Is the Blockchain Process?
As a result, parties who don’t trust each other can communicate vital data in a safe, untainted manner.
— Technology Review at MIT
To understand the blockchain, we need to understand three key concepts: blocks, nodes, and mining.
There are three essential aspects to every block in every chain:
There are several ways to get involved with MIT Technology Review.
To understand the blockchain, we need to understand three key concepts: blocks, nodes, and mining.
Blocks
In a chain, each block comprises three elements:
A block’s contents.
Nonce is a 32-bit integer. When a block is formed, a nonce is randomly generated, which creates a block header hash.
Hash is 256-bit integer that is tethered to a random number (nonce). A big number of zeroes must be the first thing to appear (i.e., be extremely small).
A nonce creates the cryptographic hash when the first block of a chain is produced. When a block is mined, the nonce and hash are permanently linked to the contents in the block.
Miners
The process of mining is used to add new blocks to the chain.
It’s not straightforward to mine a block in a blockchain since each one has its own nonce and hash, but it also references the preceding one in the chain.
In order to obtain a nonce that yields a valid hash, miners utilise special software to tackle the very hard arithmetic problems. Due to the fact that the nonce is only 32 bits and the hash is 256 bits, there are about four billion potential nonce-hash combinations that must be mined before the proper one is identified. Miner’s “golden nonce” is found at that point, and their block is added to the chain.
It’s not enough to alter a block earlier in the chain; you’ll have to re-mine every block that follows it. Because of this, blockchain technology is exceedingly difficult to manipulate.
Remember that discovering golden nonces takes a lot of time and computer resources.
Mined blocks are acknowledged by all nodes on the network, and miners are paid monetarily for their efforts.
Uses
Cryptocurrencies: The Technological Rise of Blockchains
When it comes to cryptocurrency, blockchain technology is probably the best-known (and maybe the most contentious). A cryptocurrency is a form of digital currency, such as Bitcoin, Ethereum or Litecoin. Cryptocurrency may be used to buy anything from your lunch to your future house, just like a digital version of cash. Blockchain acts as a public ledger and an upgraded cryptographic security system, so online transactions are always recorded and safeguarded using cryptography.
DESCRIBE THE WORKINGS OF CRYPTOCURRENCY
For every transaction to be recorded and secured, cryptocurrencies rely on blockchain technology. Currency like Bitcoin may be used to make purchases from little purchases like groceries and clothing, all the way up to major ones like vehicles and mansions. A digital wallet or trading platform may be used to acquire it. Once purchased, the object can be digitally transferred, with the blockchain documenting the transaction and the new owner. As a result of cryptography, all transactions are timestamped and irrefutable.
With a total market capitalization of $1.6 trillion, there are about 6,700 crypto currencies in existence today, with Bitcoin accounting for most of that value. Over the previous few years, these tokens have grown extremely popular, with one Bitcoin worth $60,000. Many theories have emerged as to why people are now paying attention to cryptocurrency:
Each cryptocurrency has its own unique identifier that can only be traced to one owner, making theft considerably more difficult.
With blockchain, crypto may be delivered to anybody in the globe without the need for currency exchange or interference from central banks.
The price of crypto, notably Bitcoin, has been driven up by speculators, which has helped some early adopters become millionaires. On the other hand, there are some who believe that crypto-speculators aren’t thinking about the long-term advantages.
Naturally, there are numerous valid reasons against digital currencies based on blockchain technology. First and foremost, the crypto market is not well-regulated. While many countries have jumped on the crypto bandwagon, very few have enacted a set of regulations that are clear and unambiguous. Cryptocurrency is also extremely volatile due to the speculators described above. In 2016, the price of a Bitcoin token was about $450. Token prices then skyrocketed from $3,100 to over $60,000 in 2018, before plummeting again. Some people have become extremely wealthy as a result of the lack of stability, while the majority have lost tens of thousands of dollars.
We’ll have to wait and see if digital currencies are the future or not. For the time being, it appears that blockchain’s stratospheric growth is more than just hype. As a brand-new and highly-exploratory area, blockchain has potential for more than just Bitcoin.
The Ethereum Blockchain is a great alternative to Bitcoin
Because of its transparency and security, blockchain technology has been used in a variety of fields, a trend that can be traced back in part to the creation of the Ethereum blockchain.
At the end of 2013, Vitalik Buterin, a Russian-Canadian developer, issued a white paper proposing a platform that combines typical blockchain capabilities with one major difference: the execution of computer code. Ether became a reality.
Cryptocurrencies such as Bitcoin and Ethereum allow software developers to construct complex programmes that can connect with one another on their blockchains.
Tokens
It is possible for Ethereum programmers to build tokens that represent any type of digital asset. They can also monitor ownership of the tokens and perform their functionality based on specific programming instructions.
Songs, contracts, event tickets and even medical information may be used as tokens. Recent years have seen a rise in the popularity of Non-Fungible Tokens (NFTs). Blockchain-based NFTs are unique digital media tokens that may be stored on the blockchain (like a video, music or art). In addition to verifying the validity of a piece of digital material, each NFT has the capacity to authenticate its prior history and exclusive ownership. A new generation of digital artists has taken to NFTs because they allow them to purchase and sell their products while receiving proper credit and a fair portion of earnings.
Blockchain’s potential to penetrate other industries, such as media, governance, and identity security, has been widened by its newfound applications. There are already tens of thousands of firms studying and creating products and ecosystems that operate solely on the new technology.
Using blockchain technology, firms may experiment with cutting-edge technologies such as peer-to-peer energy distribution and decentralised news media. Blockchain’s usage will develop along with technology, just as its definition has.
THE USE OF BLOCKCHAIN
Nearly every industry may benefit from the use of blockchain. In banking, ledger technology may be used to track fraud. In healthcare, it can be used to securely communicate patient medical information amongst healthcare providers.
Author: Minto Sherkhan, CEO, Sherji Technologies
