Why blockchain makes the difference?

In my previous article, I wrote about decentralization and why it is the future (not only for e-commerce). Decentralization is in one hand with blockchain. But, what exactly is the blockchain, and when and why to choose it? Let’s take it from a scratch…

What exactly is blockchain?

Blockchain seems complicated, and it certainly can be, but its core concept is really quite simple. A blockchain is an open, distributed database — simply a file with some data/records. The database is replicated across many nodes (i.e. computers) worldwide.

The blockchain network is entirely decentralized.

This means that no person or entity has control over the blockchain; this is a radical change from the centralized databases that are controlled and administered by businesses and other entities.

So how does it work? In very simple words, the file is comprised of blocks of data, with each block being connected to the previous block, forming a chain. Hence the name “blockchain”. As well as the data itself, each block also contains a record of when that block was created or edited, which makes it very useful for maintaining a detailed system of records that cannot be corrupted or lost.

The basic flow is demonstrated also in the image below. Once the transaction is entered, it is broadcasted to all nodes and clustered into blocks. Once the block is completed (e.g. valid), it is chained, locked and a new block is created. All over again.

Blockchain technology accounts for the issues of security and trust in several ways. First, new blocks are always stored linearly and chronologically. That is, they are always added to the “end” of the blockchain. After,

it is very difficult to go back and alter the contents of the block unless the majority reached a consensus to do so.

That’s because each block contains its own hash, along with the hash of the block before it, as well as the previously mentioned time stamp. Hash codes are created by a math function that turns digital information into a string of numbers and letters. If that information is edited in any way, the hash code changes as well.

As the blockchain database is duplicated across many nodes, each node has its own copy of the chain that gets updated as fresh blocks are confirmed and added. It also means that any user can view the entire blockchain. Transactions and data are processed not by one central administrator, but by a network of users (nodes) who work to verify the data and achieve a consensus. In the Busy solution, we have modified the original proof of stake consensus, making it unique in its function by some specific features (for more details, see the white paper of Busy technology).

So what are the benefits?

• You get a history of activity, not just a snapshot in time. When you look at a regular database, you’re getting a snapshot of data that’s up to date at that moment in time. Blockchains do this too, but they also maintain a record of all the information that existed before. It’s a database with history.
• History is immutable. Once a block is written to a blockchain, it cannot be altered, even if you update the data in the block it doesn’t get overwritten instead is stored in a new block.
• There is no central point of attack. The fact that blockchain is a decentralized way of storing and accessing data makes the whole system incredibly secure, because, unlike a centralized database, there’s no one single point of entry for hackers.
• No centralized control. Because the system of records is decentralized and replicated in its entirety in multiple places, there’s no need for a central administrator and all the costs and infrastructure that comes with it.
• Accuracy of the Chain. Transactions on the blockchain network are approved by a network of thousands of nodes. This removes almost all human involvement in the verification process, resulting in less human error and an accurate record of information.

Why use the blockchain?

Blockchain is certainly exciting and has the potential to transform the operations of many businesses. Here are some examples of why the use of blockchain is preferred over a standard centralized database:

• If it is required to manage and secure digital relationships or keep a decentralized, shared system of record. Anytime you want to keep a long-term, transparent record of assets (for example, to record property or land rights), blockchain could be the ideal solution. ‘Smart contracts’, in particular, are great for facilitating digital relationships and transactions. With a smart contract, automated payments can be released when parties in a transaction agree that their conditions have been met.
• If exists an expensive or time-consuming middleman or gatekeeper function. For example, most freelancers have to interact with other users via a centralized aggregator platform, like Fiverr, Freelancer, or Upwork (who, in turn, take a fee from each agreement). Blockchain can change all that.
• If secured transactions need to be recorded between multiple users. A traditional database may be good for recording simple transactions between two users, but when things get more complicated, blockchain can reduce bottlenecks and simplify relationships. What’s more, the added security of a decentralized system makes blockchain ideal for transactions in general.
• If data is in constant flux, but a record of past actions needs to be kept. Blockchain is a better, safer way to record the activity and keep data fresh while maintaining a record of its history. The data can’t be corrupted by anyone or accidentally deleted.

And are there some reasons not to use the blockchain?

Well, there are currently not a lot of good reasons why not to use it. As time goes, blockchain will transform and will be usable in every business, but to mention a few:

• Blockchain is not the ideal solution for super-fast digital transactions that take place in milliseconds. Blockchain requires huge amounts of computing power and also a few second to replicate all records among all notes, so for super-fast transactions, a centralized database is likely to be a faster, cheaper way of processing and storing the information. For now…
• Blockchain is an open chain of information. So anytime confidentiality is a key consideration, a private database is (at least for now) the better option.

Perhaps the most telling of all is the future potential of blockchain technology. While other systems are finding their value diminished in this digital age,

Blockchain’s ability to combine the security of cryptography, the storage and transmission of encoded data, and peer-to-peer networks to create a shared database means that its use in various industries is endless.

The beauty of blockchain is that something can be unique and stored digitally, without needing an equivalent in the real world, meaning there are limitless possibilities for contracts, wills, deeds, certificates, and, of course eventually a digitally integrated global economy. Through a global economy, we could see enhanced economic growth and decreased world poverty.

In conclusion, blockchain is still evolving and maturing all the time. But the advantages and uses set out in this article show that blockchain technology is definitely worth considering for the present and future if a decentralized system of records would suit your business.

Next time, I will focus on the freelance sector from a statistics point of view as there will be visible its potential and why to focus on it. And, also, what is going the Busy technology change.

Stay Busy & Join Revolution Today!

If you are interested in the Busy solution, check our website https://www.busy.technology!

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