What are the Blockchain and What Makes it So Popular?
A lot of people are talking about the new protocol that is called the Blockchain. The basic premise of the Blockchain is that it is an online ledger which provides a public view of how money is transacted in the entire network of Blockchains. The Blockchain was developed by the Core Developers team and has been receiving support from various financial institutions and governments all over the world. In order for businesses and individuals to take advantage of the Blockchain technology there are several options that are open to them.
Namely, you can use the Blockchain to do things like instant currency exchanges, transfer of money, asset exchange, real-time updates on transfer times, computations and cross chain aggregation. But there is even more to the Blockchain than these things. Namely, the Blockchain is a framework that allows for smart contracts to be executed within distributed systems. This is accomplished through what is known as “Smart Contract Technology”. The purpose of the Blockchains technology is to allow for programmers to specify certain transaction parameters and conditions and then execute the contract without the need for a central administrator or agent.
However, the most impressive thing about the Blockchain is the potential it has to transform transactional relationships between people, institutions, organizations, financial entities and other such entities. One specific use for the Blockchain is referred to as “Proof of Stake” or “Proof of Assurance”. Basically, when two participants enter into a smart contract with each agreeing to stake a certain amount of their own funds then this is considered to be a secure transaction. In a nutshell, the participants in the smart contract each agree to invest a certain amount of their own assets into the Blockchains asset pool and this is what becomes the basis of the distribution of dividends. Through this distributed dividend, the investors are protected from any loss and are able to receive a regular return on their investment.
Another use of the Blockchain is called “Decentralized Autopilot” which basically means that the decentralized nature of the Blockchains allows for real time execution of any transactions or computations that need to occur instantaneously. For instance, during the execution of a trade, it is not feasible for a human to manually verify all of the necessary details of that particular transaction. In order to make certain that all aspects of the investment are appropriately covered, the uses of the Decentralized Autopilot technology include the ability to automatically check and update the status of all transactions that are taking place at any given moment. The main advantage of this distributed ledger technology is that any type of third party will be able to verify all aspects of the transactions without needing to intervene directly or in any way. In short, it guarantees that privacy is maintained while utilizing the incredible power of the Internet.
The uses of the Blockchain are only limited by the imagination. One popular use for the Blockchains technology is through what is known as “Proof of Stake”. Basically, when a group of investors are investing in a specific business endeavor, the stakeholders will often put up money in order to ensure that they are investing into the right venture. This is done by creating a sort of “chain” that can serve as a record of the investment. By using this form of proof of stake method, the group backing the investments can determine exactly how much of the profits should be given out to the investors as well as how much should be kept by the venture itself.
There are many other ways that the Decentralized Autopilot technology can be utilized as well. The most commonly known way that people use the Blockchain to create privacy is through the use of what is known as “Singaporening”. Essentially, by utilizing the distributed ledger technology, anyone can maintain complete anonymity while doing transactions with another person or company. This particular feature makes the entire process of conducting business on the Blockchain completely anonymous, making the use of the Decentralized Autopilot system extremely useful in various circumstances.
In terms of where exactly the distributed ledger technology comes from, the original inspiration can be traced all the way back to the Internet’s founding principles. One such principle that was originally established by the Internet’s founder Tim Berners-Lee is that information should be free and open to all. This includes anything that is generated and accessed on the Internet, including blocks of code that are created by software developers. These software developers then went on to create what is now the bitcoin protocol. With the assistance of an online editor called the explorer, anyone was able to view and edit their private keys, which essentially acts as virtual passwords for their associated electronic gadgets. The genius of this process is that anyone can view the public key that corresponds to their private key without having to reveal their actual password to anyone else.
The genius of the bitcoin protocol lies in how it was able to overcome all of the problems that were inherent with the traditional forms of cryptography. Cryptography is used to secure a network by preventing unauthorized access to the information that is contained within it. The problem that was faced with the traditional forms of cryptography is that an outside party may compile a list of keys that belong to a certain individual, thus breaking the security of the entire system. Unlike the bitcoin system, however, there is no such thing as an outside party manipulating the cryptography; instead, all of the work that goes into making the bitcoin cryptography work is done by users themselves in the form of user generated software.