WHAT IS BLOCKCHAIN?

Blockchain — A super hot keyword since early 2017 to date, a technology with a lot of useful applications in many different fields such as banking, education, economics, game, e-commerce. and even agriculture. From Blockchain 3.0 technology to blockchain 4.0 and it is constantly evolving worldwide, many countries have successfully applied this block technology.

-What is Blockchain?

-How does it work?

-How is it applied?

-Let KriptoA help you to find out. Let’s go :

What is Blockchain?

Blockchain or ledger, is a database system containing information, which is used to store information in linked blocks together, and managed by all participants in the system, rather than a single, individual third party such as the central government or the central bank. It also allows for secure data transmission with a complex encryption system and spreading over time.

Blockchain is built to prevent data changes in the system, blockchain technology also has a very special feature: the data transmission does not require any intermediary to confirm. information. Because in the Blockchain system there are many independent nodes that can authenticate the information in the system without requiring a “signal of trust”.

Information that is entered in the blockchain technology will not be changed and only added when approved by everyone in the system. This is a very secure system for data prior to the risk of theft, especially sensitive data such as online bank account, payment card account … Even if part of the blockchain system is attacked, the other parts are not affected and still work to protect the information.

Blockchain is considered by some experts in the world as a major accounting book (also known as the ledger) of a company where all its money-related activities are closely monitored. In this case Blockchain is a ledger in the field of technology, and data is stored as digital data.

Some main features of Blockchain technology

Blockchain technology is like a diary of all transactions occurring in the system. The main features of blockchain are :
Can’t be replicate , can’t break blockchain strings: Blockchain strings are almost indestructible, and in theory only quantum computers can intervene and decipher blockchains and it only It is completely destroyed when there is no internet around the globe.

Immutability: The data in blockchain is almost irreversible (can only be modified by the creator himself, but must be consensus of the nodes on the network) and the data will be kept forever

Data Security: The information and data in the blockchain chains are scattered and absolutely secure that only the private key holder has access to that data.

Transparency: Anyone can track the path of data in a blockchain from one address to another and can record the entire history on that address.

Smart contracts: They are digital embedded by an if-this-then-that (IFTTT) code in the system, allowing them to execute itself without the need of a third party. Blockchain does not need a third party to participate in the system, and it ensures that all parties know the contract details and the terms will be automatically executed once the conditions are met.

How is the blockchain classified?

The Blockchain system is divided into three main categories:
Public: This is a blockchain system that anyone can read and write data on blockchain. Authentication process on this blockchain requires thousands or even tens of thousands of participants. Therefore, it is impossible to attack the blockchain system because of its high cost. Example of public blockchain: Bitcoin, Ethereum …

Private: This is a blockchain system that allows users to only read data, not write permissions because this belongs to a trusted third party. This third party may or may not allow the user to read the data in some cases. The third party in full control of all changes on Blockchain. Since this is a Private Blockchain, the transaction confirmation time is quite fast as only a small number of devices are required to participate in transaction authentication.

Permissioned: you can call it the consortium, it is a form of private blockchain, but adds a number of features, combining “trust” with participation in public and “absolute trust” when joining Private. For example, banks or joint venture financial institutions will use their own Blockchain.

The main versions of Blockchain

Currently, blockchain technology has three main versions:

Blockchain 1.0 — Currencies and Payments: A primary version of blockchain, the main application of this release is the work related to coding money: including currency conversion, remittance and creation. Set up a digital payment system. This is also a familiar field with many people,making they think that BTC and Blockchain are one

Blockchain 2.0 — Finance and Markets: This is the second version of the blockchain, its application is the financial and banking process: the expansion of Blockchain, the integration of blockchain into financial and marketing applications. school. Assets include stocks, checks, debt, ownership, and anything related to an agreement or contract.

Blockchain 3.0 — Design and Supervision: The highest version of blockchain at the moment , with this release Blockchain technology will cross the border for the financial sector only, and go into the field. Other areas such as education, government, health and art …

The consensus mechanism in Blockchain

The Blockchain consensus mechanism can be understood as the way that people managing the blockchain system can agree on a transaction occurring in the system. Here are the common types of consensus mechanisms in blockchain:

Proof of Work: This is the most common consensus mechanism used inBitcoin, Ethereum, Litecoin, Dogecoin, and most codewords. This is a consensual mechanism that consumes a lot of power.

Proof of Stake: This is the common consensus mechanism in Decred, Peercoin and in the future is Ethereum and many other coding types. This mechanism of consensus is more decentralized, less energy consuming and not easily threatened.

Delegated Proof-of-Stake: This is a common consensus mechanism in Steemit, EOS, BitShares. This consensus mechanism has low transaction costs; extendable; High energy efficiency. However, it’s still a bit focused because this algorithm chooses trusted people to delegate.

Proof of Authority: This is the common consensus mechanism commonly found in the POA.Network, Ethereum Kovan testnet. This consensus mechanism is highly efficient, has good scalability.
Proof-of-Weight (This is the most common consensus mechanism in Algorand, Filecoin. This consensus mechanism is customizable and scalable. However, the process of promoting development will be a big challenge.

Byzantine Fault Tolerance: This is the common consensus mechanism in Hyperledger, Stellar, Dispatch, and Ripple. This consensus mechanism is highly productive; low cost; extendable. However, it still can not be trusted.

This algorithm has 2 versions:

• Practical Byzantine Fault Tolerance (The Anti-Cheat Coalition / Byzantine Block Encircles Blockchain in Practice).
• Federated Byzantine Agreement (Byzantine Coalition).

Directed Acyclic Graphs: This is the usual consensus mechanism in Iota (Tangle technology), Hashgraph, Raiblocks / Nano (Block-lattice technology), is a Blockchain rival.

How does Blockchain technology work?

Blockchain technology is probably the best invention from the Internet itself. It allows exchange of values ​​without trust or evidence. Imagine you and I bet $ 50 for tomorrow’s weather in San Francisco. I bet the sun will be sunny, you bet is rain. Today we have three options to manage this transaction:

We can trust each other : Rainy or sunny, the loser will pay $ 50 to the winner. If we are friends, this can be a great way to bet. However, even friends or strangers can not easily afford the other.

We can turn a bet into a contract : With a contract in place, both parties will be more likely to pay, however, if one of them decides not to pay, the winner will have to pay extra to cover the legal costs and possible judgments. take a long time. Especially with a small amount of cash, this does not seem to be the optimal way to manage the transaction.

We can rely on a neutral third party. Each of us gives $ 50 to a third person, she will bring the total amount to the winner. But, she can also run away with all the money. So, we will choose either the first option: trust or contract.

Both trust and contract are not optimal solutions. We can not trust strangers and enforce contracts that require time and money. Blockchain technology is interesting because it provides us with a third option, safe, fast and inexpensive.

Blockchain allows you to write a few lines of code, the program runs on blockchain, which we both send $ 50 to. This program will keep $ 100 safe and automatically check the weather tomorrow on multiple sources. Sunny or rain, it automatically transfers the entire amount to the winner. Each side can check the logic contract, and since it is running on blockchain it can not be changed or stopped. This effort may be too high for a $ 50 transaction, but imagine selling a home or company.

The goal of this section is to explain how blockchain works without discussing the technical details, but enough for you to have a general idea of ​​the logic and underlying mechanism.

The application of blockchain in life

The first well-known utility of blockchain technology is probably Bitcoin and other electronic currencies, but Blockchain is currently revolutionizing most of its industries. Here are some practical examples of the application of blockchain technology in life.

1. Blockchain application in e-commerce

• Warranteer: A blockchain application that allows consumers to easily access information about the product they purchased and receive service support in the event of a product malfunction.
• Blockpoint: An application that simplifies the creation of payment systems and accepts e-wallets, loyalty programs, gift cards and other functions.
• Loyyal: Backed by blockchain technology and smart contracts, this loyalty and loyalty client platform creates more customizable programs that allow customers to accumulate bonuses from a variety of brands

2. Blockchain application in agriculture

• Food industry: A blockchain application that can improve transparency and efficiency in identifying contaminated foods and where they are throughout the supply chain.
• OriginTrail: A blockchain platform that allows consumers to know where the foodstuffs they buy come from and how they are produced.

3. Blockchain application in financial services, banking

• Bitcoin Atom: Bitcoin is a new branch of Bitcoin that allows for easy exchange of pre-encrypted passwords without the need for transaction costs and can not be compromised when dealing with Bitcoin. This technology is based on atomic swaps — which is considered an invaluable tool for exchanging encoded currencies and does not require a reliable third party. But now the widespread adoption of atomic swaps has been curtailed as they require high technical skills; Bitcoin Atom can solve this problem in part.
• Securrency: This is a pre-encrypted transaction platform and several types of assets, including non-swap assets, are exchanged through the Securrency token. The project allows encoding money to be transacted outside of their dedicated transactions.
• Ripple: Ripple aims to become a global payment solution provider by connecting banks, payment service providers, businesses, and digital property transactions, enabling immediate settlement. immediately, according to global demand.
• ABRA: A global application and cryptographic wallet that allows you to purchase, invest and store 20 types of pre-coded, including Bitcoin, ethereum, litecoin …
• Aeternity: This highly scalable blockchain platform can be used for any application that requires high transaction speed, including smart contracts generated from chain payments, nano. and micro.

4. Blockchain application in education, health

• MedicalChain: This is the first healthcare company to use blockchain technology to facilitate the storage and use of electronic medical records to provide a complete telemedicine experience. They are actual doctors in the British healthcare system and want to change this system from within.
• MedRec: To provide any healthcare provider with secure access to patient records, MedRec uses blockchain to save time, money, and repetitive procedures in the conduct of the procedure. between different establishments and suppliers. Patients also have access to their medical records to study the providers of medical services.
• Epilogue: We hope the article above helps you get more out of the blockchain. If you have any questions or would like to share your knowledge of blockchain technology with us, please contact us under the comments, we will respond soon to you. If you want to learn more, please go to : kriptoa.com/