If to explain it to the people who are really far from science & IT, this is a principle on which bitcoin is built. But there are, perhaps, dozens of other ways to use it except for cryptocurrency. There are many people who call the blockchain using such words as “revolutionary”, “unimaginable”, “profitable”. Are you already among them?
The very principle of blocking is quite simple. It can be represented as an account book. Can you imagine this? Just close your eyes. Each participant of the chain with BTC, Ethereum or LTC like having its own page which is constantly updated. There is no room for deceiving the system. It’d like FBI. No extra pages or new records. Because the smart superficial intellect immediately analyses myriads of previous versions. It’s as easy as pie and discovers a discrepancy in the well-thought structure of the blocks.
How does it work?
Read about some technical details which back up the entire process:
- The basic blocking system is a constantly growing sequence of blocks. They are shared between participants who need peer-to-peer networks. Such one the most people use to download and distribute different things on torrents.
- A time stamp (hash sum) is added to each block. The easiest way to imagine it is in a form of a unique fingerprint. These units are organized in a certain order. No wonder that English semantic of the term is “chain of blocks”. If you try to rearrange something in this very accurate order, the system will track this – like turning on a red light.
- So that no one can make any mess, hacker attack or scammers’ trick, the system uses several methods of protection. The most famous is Proof of Work (PoW), read more about this on the special websites.
Hype or not? Time will tell…
All these tricks are highly lucrative for users. Those who make some transactions jointly can’t deceive each other. It does not need intermediaries like a bank. Cool! There is no central node in it, by destroying which you can knock down the entire system. All operations are transparent to all people since the information and figures are stored in one database.
Where can this be applied?
In addition to cryptocurrency, blocking technology already attracts even old financial institutions:
- According to statistics, more than 1000 cases were registered with the use of a blockade in fintech.
- The second way is smart contracts that cut out of the equation a lot of legal red tape. For example, an electronic notary Stampery assures transactions with the help of this world know-how.
- Another interesting possibility to use is the scope of copyright and personal data. You may recommend artists and other creative people to confirm their authorship with the help of this framework. Startups like Civic and UniquID Wallet allow people to create digital IDs that cannot be faked. In the future, they can replace regular ID cards.
- Building up a reliable & powerful energy distribution systems
In general, the areas of blockchain application are numerous starting from the trade in cryptocurrencies, diamonds, and gold, to the creation of trustworthy presidential/parliamentary voting systems. But don’t forget, that the first & foremost target of it is Bitcoin anyway.