welcome to the second article in the blockchain series. In this article we’ll be going through the concept of blockchain . We’ll be understanding some of the basic functionalities. And finally we’ll be looking at some of the competitive advantages it has over the current systems.
So let us start with understanding what is the blockchain.
- Well first the blockchain is simply a distributed.
Second if you look at the technical definition it says that the blockchain is a distributed beer to peer ledger.
If you’ve been through the previous video as we’ve discussed a distributed system is one where every
participant is a point of authority and they are all equal in nature.
And it is through the interaction that the system is supported.
Finally the ledger world comes in because the blockchain is nothing but a registry of transactions of various sorts.
As we will see later every participant within the system has a complete version of the database or to be more technical or Ledger off the transactions. So every participant has an insight into the complete list and history of transactions that are happened in that particular network. This is what puts in the factor of transparency in blocking systems then every transaction is declared
valid only and only after it has been cleared by majority of the participants in the network. There is a consensus required to validate any transaction in the network. This is done with consensus algorithms and hash cryptography This ensures that hacking the system is economically unfeasible and only those transactions are decisions go to the system which are cleared by majority by majority.
Blockchian democratic system.
You can think of this as a democratic system of sorts but that’s just my take on it. Then the blockchain can transfer any item of value. It does not have to be a cryptocurrency or information any item that carries any form of value. Any asset can be transferred across the network. It is simply the rights that are being transferred. Next the blockchain is the underlying technology behind the bitcoin. This is how the block chain was invented. In fact in 2008 when Satoshi Nakamoto released the white people on peer to peer systems called Bitcoins people first experimented with the concept of Bitcoin and then realized that the underlying technology behind the bitcoin can be used for many other purposes.
And this is what came to be known as the blockchain.And this brings me to my final point and this is a really important point. If you want to understand the blotching course properly is that a blockchain is not the bitcoin. Now I have taken several conferences and seminars over the past few months and I faced this issue repeatedly where people cannot pass the Baddiel that the blotching and the Bitcoin are the same thing.
important a point that the blockchain.
- So I would like to reiterate this and it is that important a point that the blockchain is not equal to
- the Bitcoin now why see this it is simply an application of the Bitcoin I would look at it as Facebook and the Internet.
- The internet isn’t Facebook because Facebook is simply an application that uses the Internet similarly
- blockchain that technology offers multiple use cases in various industries any industry that faces
an issue with the safety of records and data and could use the elimination of middlemen as an industrythat is viable to be disrupted by the blotching thus to again reiterate blockchain is the technology that surrounds the Bitcoin.
The Bitcoin is simply an application that uses the technology called blotching and the blockchain can be used for many other purposes.
As we will now see to our use cases in different articels. Now a blockchain enables us participants to transfer any item of value. These can include cryptocurrencies cards information intellectual property anything every user is connected to every user. And multiple copies of the records are maintained to ensure transparency and safety. The lack of middlemen in these systems drives down costs does all these features make the blockchain
a safer more secure and cheaper method of transacting. So let us sum up some of the advantages that are highlighted. The First there is dis intermediation. The system is self-supported and it depends on a high number of users to ensure a smooth functioning. It does not require an intermediary to validate transactions or act as a third party.
This is very important because in an ideal situation middlemen simply drive costs up and reduce efficiency.
They also slow down the system. Second and power users all the users have equal power and there is no hierarchy. In fact the hierarchy is flat. Thus every user is in charge of verifying transactions and keeping the system self-sustained process integrity there is a systematic procedure for verifying transactions and this makes users trust the system. Transparency and immutability.
Let us talk about immutability first.
The concept of immutability states that any previous records and transactions cannot be erased. What this shows is that there cannot be any fraud. Because you cannot go back historically and change the value or any particular record to your own gain to reverse any previous transactions. A new transaction has to be proposed to the network and then approved by every participant in the network.
There are faster transactions now all of this isn’t true as of today. As systems such as Visa and Mastercard are much faster in processing transactions.The blockchainnetworks are becoming faster and evolving as I mentioned earlier it is still an innocent technology.
It is destabilizing but as more and more users join the network and there is an increase in the number of minors the transaction time will keep improving. And finally it will beat the current systems. It would thus be the fastest system available. Once the sufficient number of people have joined the network and finally the system is cheaper simply because there is no intermediary and this is going to have a downward pull on the cost.
So to sum up the blocchain might be cheapest the safest soon to be the fastest the most transparent system that ever existed. It gives more power to the people and puts less power or takes away all the power from intermediaries. Think about todays world intermediaries exist everywhere from your bank to the government to SEALs everywhere. And although till date we have thought of their function in the entire production process to be really important.
If there was a way that technology can substitute their function it would be a win win for the producer and the consumer. And that day has finally come the blockchain is the technology that will reduce our dependency and imageries tanks are watching this video on the box chain basics.
We shall now start examining the different use cases of the blockchain and looking at the business landscape.We will look at different companies investment marathondh.com and where the industrial blotching is headed into the future.
List of top blockchain investment companies.