Blockchain Technology in Simple Words

Blockchain Technology – the New Internet?

The blockchain is a great inventio, which can be not just used in all fields of life, but to change the way the human world functions. This is the invention of Satoshi Nakamoto, a person or a group of people, somebody that is a mystery till now.

Initially, it was created for bitcoin, though since then, the Blockchain technology has developed into something that can change many life-walks.

What Is Blockchain?

The blockchain is initially a network that allows distribution or cryptocurrency, though not copying it. Like this, the Blockchain has created a new kind of the internet. Originally this invention was only for cryptocurrency, bitcoin in particular, but with time, it found ways to technology.

You can use the Blockchain even if you don’t know how it works, the same like with your car, or the internet. You just use it.

The blockchain is some kind of a database, some kind of a network that stores information. Information isn’t stored in any particular location, it means, everybody who is using the network has access to information.

We can understand it better when we compare a Microsoft Word document with Google Docs. When we send a word document, we send it to one or some recipient. The rest do not have access to it unless you send it to them as well. If you need to make changes after the person inserts some information, you have to wait again, till that person sends the document back. This is the work principle of most financial, and not only financial systems, nowadays. This is the way the banks work.

Now, GoogleDocs. Any number of people can use them simultaneously if they have a link to the document. You can see the changes online, in real-time mode. You can make changes without waiting for other participants. Just imagine how much time it saves and how much this approach simplifies the workflow.

The blockchain technology is about storing information in blocks. They are identical all around the network, it means, that:

– A single authority is not able to control the blockchain;
– No single failure point is available.

Since the time of its invention, 2008, the technology has been working without a single disruption. Any issues connected with bitcoin were caused by other reasons than the blockchain.

Corruption? With Blockchain, It Is Impossible!

The blockchain technology is based on consensus. It is a system that checks itself periodically. This is some kind of self-auditing ecosystem of digital values. Every transaction that happens is checked and verified by the network every ten minutes. A group of such translations is called a block and is stored in blockchain like millions of other blocks. Hence, the blockchain has he following valuable features:

– The blockchain is absolutely transparent. Data is available for public, for whoever is using the blockchain.
– No corruption. If one needs to change a single bit of data, this person needs to overwrite loads of information, practically the entire work. Theoretically it may be possible, with using of enormous amount of computing power.

Practically, rather nobody can make it now. With time, when the data volumes are growing, it becomes even more impossible.

A Network Consisting of Nodes

The blockchain is the network of nodes. A node is a computer connected to the network. Its task is to validate and relay the transactions. Each such node, or a computer, gets a copy of blockchain, which downloads automatically.
Each node performs am admin function. Each node joins the blockchain network voluntarily, that is why the network is decentralized.

Each node is competing with others to solve the cryptopuzzle and get the bitcoin. Initially, just this was the function of the blockchain, though now, the blockchain technology can be applied in many fields.

Where Blockchain Can be Used

You don’t need to know much about the blockchain to use it. Just hire a specialist, and he will do all for you.
For now, the blockchain can find the widest application in the banking system. The initial principle of the blockchain technology was about money transfer, then, why not the real money?

The blockchain eliminates the middleman in those transactions. Personal computer is affordable practically to anybody nowadays, and the GUI made its application even simpler. A similar GUI is used by the Blockchain, it is called a wallet application. It is used to handle bitcoin and other cryptocurrencies.

Online transactions are closely connected with personality identification and provision of private personal and financial information. For now, this is a wallet number, though it can be that in some years this wallet app will transform so that it will contain all personal information that is needed.

Blockchain is Secure

Data storing in the network is safer than data storing centrally. The blockchain technology doesn’t have vulnerabilities that ca be exploited by hackers. For safety, encryption technology is used.

The base of this safety is created with public and private keys. A public key allows a user to perform access to the blockchain. The private key is a password that allows the user access his own wallet and own coins.

Blockchain is the technology that can change the future not only of the financial world, but of industry and many other fields, in a better way, if used properly. It has a huge potential and doesn’t depend on personal ambitions.

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