Blockchain for Dummies
Understanding What Blockchain is All About
If you’ve heard about or had anything to do with cryptocurrencies, like Bitcoin, or you’ve been on the financial technology scenes, you should be familiar with the word “Blockchain.” While many people trade and buy cryptocurrencies, they forego the underlying technology only because it seems too technical to understand. Well, it is indeed painless, and though most think it evolved with Bitcoin, its history can be traced back as far as about 25 years.
Cryptography and Blockchain
Like Daily Dot’s Claire Downs said, if you need to understand Blockchain, you should be familiar with encryption and the basics. Looking at it from her perspective, you could see the process of encryption as trying to match up numbers with letters in the alphabet which is comparable to a key in a decoder ring. It’s also similar to trying to open a trick-lock or a puzzle-lock, like those created in the 17th century to keep out thieves, you’d need a lot of imaginative and logical skills to pick such a lock without the key.
Encryption is just a computerized version of the puzzle lock. It uses codes to keep files and data intact with which a key is needed to crack. Now, after encrypting a file or data, it is accessible by authorized systems with the keys which exposes your data to high risks of getting phished or stolen. This is where Blockchain comes in.
How Blockchain Works
Now, the internet exposes your data and files to threats and easy access since it is web administrators who assume the databases, update management, and cyber-threat protection controls implying that the system is centralized. Basically, when you see the word “centralized,” you can associate it with banks/financial institutions or any record-keeping institutions where your transactions and data are recorded and safely kept by a third-party/institution.
The limitations of this system, however, remain that, anyone can access your files and control over data is limited. You see, with Blockchain, it is like transacting with a public ledger where all transactions are confirmed and recorded between two parties without the need for a middleman or an intermediary. This means that once this transaction is approved or a record is made, your data will remain unaltered.
According to Anders Brownworth, Blockchain is merely a chain of blocks. Now to understand what blocks are, you need to know what a hash code is. Hash strings your data for encryption, and the blocks contains the information from the hash such that stringing them together implies that each block includes the hash or database of the previous block (creating a chain of ‘blocks’). Simply put, blockchain virtually eliminates the risk of altered data contained in the ‘blocks.’
Blockchain allows transparency in transactions because interactions between these blocks ensure that your data remains unaltered and is confirmed quickly with the software codes becoming your middleman.
Blockchain is the technology integrated by cryptocurrencies, and while interests in the technology have been garnered in the evolution of financial technology, it is difficult to pick out institutions and systems that had adopted this technology.
If you’ve taken an interest in cryptocurrencies, you’d note that the market has been quite volatile in recent times and with the price shifts, more online cryptocurrency lotteries are being integrated. However, as with most traditional lottery systems, the circle of misconduct and abuse never ends, especially with the lotteries hoping to gain from their client’s losses.
Belotto, however, is one online lottery that offers you a chance to get more cryptocurrencies without incurring any loss by incorporating its system with Blockchain technology to establish decentralization.
With Belotto, you don’t run at a risk of a rigged drawing since hashes bear the information of wins, and they transfer your cryptocurrency via another application of blockchain-smart contracts. This system provides full transparency and guarantees the appropriate prize delivery. Belotto stores all prizes in an escrow wallet and then the smart contract transfers them automatically once the hashes confirm the winners. Finally, the house knows about the win at the same time as the participants.
