A chain of blocks or the world without intermediaries
Blockchain or, as it’s called, “Internet of Value” — is an innovative technology which combines transparency and high security. The importance of such invention could be compared with the invention of the Internet. It is believed that in the nearest future technology of blockchain will turn the world upside down, as it gives a new look at the exchange of values and information.
So, the working principle of blockchain is quite simple. It can be compared with an ordinary diary, where you can consistently add any event, starting with financial transactions with cryptocurrency like Bitcoin, Ethereum, or what you do in daily life: eat, sleep, borrow money, etc., ending with the introduction of voting results for presidential elections or identification data. No stranger can make changes to the “diary”, as the information is encrypted in a special way, and the code is developed more than qualitatively. In real life, If diary exists in one copy, than it is quite possible that something could happen to it: for example,a house can burn or bag can be stolen. However, in the network, this “diary” has many copies.
Moreover, when changes are made to one of its copies, it is automatically updated on all copies. Now, to forge a record, it’s not enough just to break the code, but you also need to look for all the existing “diaries”. And if someone tries to cheat by cutting out or pasting some foreign “page” into it, then the system will immediately turn to numerous versions of it and find an error in the block structure.
Thus, each person can post information on the Internet, and then other people can access it from anywhere in the world. Block chains allow sending any values to any country and any city where a blockchain file is available. But you must have a private key, specially created by the cryptographic algorithm, which allows you to access only those blocks that you “own”.
How does it work? The basic blockchain system is an ever-growing sequence of blocks that are divided among participants using peer-to-peer networks that most people use to download and distribute torrents. Another important function implemented is the establishment of trust relationships and the confirmation of the the person’s identity, as no one can change the chain of blocks without corresponding keys. Changes that are not confirmed by these keys are simply rejected. Of course, in theory, keys (as physical currency) can be stolen, but protecting multiple lines of computer code is usually not costly.
Database security was originally implemented on blockchain. The concept of chains of blocks was proposed in 2008 by Satoshi Nakamoto. For the first time it was realized in 2009 as a component of the digital currency — bitcoin, where the blockchain is the main general register for all transactions. Thanks to blockchain, bitcoin became the first digital currency that solves the problem of double expenses (unlike physical coins or tokens, electronic files can be reduplicated and spent twice) without using any authority or central server.
Optimists believe that in the closest future, blockchain technologies will rid the world of bureaucracy, corruption, fake elections, Internet fraud and unfulfilled contractual obligations. Indeed, how much simpler is our daily life could be, if we exclude the involvement of third parties, without any consequences for the binding and correct execution of contracts, registration of rights, the commission of transactions. Just imagine a world without regulators, notaries, banks, registrars and other intermediaries — a real blockchain paradise.
