Main Features of Blockchain.docx
- 1. Main Features of Blockchain Blockchainwasoriginallycreatedtobe adecentralizedledgerof Bitcointransactionsthattake place withinthe Bitcoin network.A decentralizedordistributeddatabase/ledgeressentiallymeansthatthe storage devices,where the ledgersare located,are notlinkedtoa commonprocessor.The blockchain containsthe ever-growinglistof transactionsbywayof blocks.Each blockistime-stampedandthen linkedtothe previousblocktobecome apart of the blockchain. Before computers,people kepttheirimportantdocumentssafe bymakinglotsof copiesof themand storingtheminimpenetrable steel safes,buriedtreasure chests,orbankvaults.Asanaddedsecurity measure you'dtranslate eachof these documentsintoasecretlanguage thatonlyyoucouldunderstand Bitcoin ATM. That way,evenif someone managedtobreakintoyourbankvaultand steal yourstuff, theywouldn'tbe able tounderstandyourcrypticmessages,andyou'dstill have lotsof backupsstoredin otherlocations. Blockchainputsthisconcepton steroids.Imagineyouanda millionfriendsare able tomake copiesof all your files,encryptthemwithspecialsoftware,andsave themineachother'sdigital bankvaults (computers) all acrossthe internet.Thatwayevenif ahacker breaksinto,steals,ordestroysyour computer,theycan't interpretyourdata,andyour networkof friendsstill have 999,999 backupsof your files.That'sblockchaininanutshell. Special files,scrambledwithencryptionsoftware sothatonlycertainpeople canread them, savedon normal computers,linkedtogetheroveranetworkor viathe internet.The filesare calledledgers - they record yourdata ina specificway.The computersare callednodesorblocks - personal computersthat share theirprocessingpower,storage space,andbandwidthwithone another.Andthe networkiscalled a chain - a seriesof connectedblocksthatletcomputersworktogethertoshare ledgersfromone another(hence the name,blockchain). The social impact of blockchaintechnologyhasalreadybeguntobe realizedandthismayjustbe the tip of the iceberg.Cryptocurrencieshave alreadyprovideddoubtsoverfinancialservicesthroughdigital wallets,the rolloutof ATMsand the provisionof loansandpaymentsystems BitcoinATM NearMe. Whenconsideringthe factthatthere are more than 2 billionpeople inthe worldtodaywithoutabank account,such shiftiscertainlyalife changerandcan onlybe a positive one. Perhapsthe shiftforcryptocurrencieswillbe easierfordevelopingcountriesthanthe processof fiat moneyandcreditcards. In a way,it issimilartothe transformationthatdevelopingcountrieshadwith cellularphones.Itwaseasiertoacquire massamountsof cell phonesthanto provide anew infrastructure forlandlinesphones.Decentralizingawayfromgovernmentsandthe control over people'sliveswill likelybe embracedbymanyandthe social implicationscanbe quite significant. One onlyneedstoconsiderthe spate of identitytheftsthathave hitthe newsinrecentyears.Handing the control of identificationtothe people wouldcertainlyeliminate sucheventsandallow people to
- 2. reveal informationwithtrust. Inadditiontogivingthe underprivilegedaccesstobankingservices, greatertransparencycouldalsoraise the profile andeffectivenessof charitiesworkingindeveloping countriesthatfall undercorruptor manipulative governments.Anincreasedlevel of trustinwhere the moneygoesandwhobenefitswouldsurelyleadtoincreasedcontributionsandsupportforthe needyin parts of the worldthatare indesperate needof aid.Ironically,andnotinline withthe publicopinion, blockchaincanbuilta financial systemthatisbasedontrust. Takingit one stepfurther,blockchaintechnologyiswell placedtoremove the possibilityof vote rigging and all of the othernegativesassociatedwiththe currentprocess.Believe itornot,Blockchaincan actually solve some of these problems BitcoinATM.Of course,witha new technology,there are new obstaclesandproblemsthatwill come butthe cycle goesonand those new problemswillbe solvedwith more sophisticatedsolutions. A decentralizedledgerwouldprovideall of the necessarydatatoaccuratelyrecordvoteson an anonymousbasis,andverifythe accuracyand whetherthere hadbeenany manipulationof the voting process.Intimidationwouldbe non-existentwithvotersbeingable tocasttheirvotesinthe privacyof theirhome. Whetherblockchaintechnologydoes,infact,become apart of everydayliferemainstobe seen.While inflatedexpectationsraisedthe possibilityof anendtocentral banksand theirresponsibilitiesaswe knowit today,an endto the centralizedfinancial systemisperhapsasteptoofar for now.Time will tell howblockchainevolves,butone thinglookstobe certaintoday.Statusquois no longeranoptionand change is needed.