BLOCKCHAIN — The basis we should know
In the next series of articles, LINA team will find and write articles for investors who have never learned through Blockchain’s technology and applications to know the basics of this technology. At the same time, when investors have basic knowledge, LINA team believes that those investors will see how potential LINA project is and what LINA team is doing.
Starting a series of articles, today’s content will talk about Bitcoin and Blockchain.
What is Bitcoin?
There are currently 4 types of money in the world:
+ Fiat money (Paper money we often use)
+ Digital money (We used in bank account)
+ Virtual money (Used in games usually released by game manufacturers, not worth buying goods)
+ Cryptocurrency (Bitcoin, Ethereum …)
Bitcoin was created in 2009 (released on January 9, 2009) by an anonymous person or organization Satoshi Nakamoto. The content and operational details are briefly and clearly described in Whitepaper, “ Bitcoin: A Peer-to-Peer Electronic Cash System “
Just like Internet Banking, all transfers on your account are recorded, just one different thing is that all transactions are recorded and cannot be deleted by anyone. All this transaction will be stored on the Blockchain network, we call it the ledger. Another difference is that this ledger is not only the person who sees the transaction information on it, but also everyone has the permission see the information of the transaction (including day/month/year and the amount of money transferred/received).
🛠🛠🛠 So how to create Bitcoin?
To process transactions, the computer system must perform a procedure — called Bitcoin miners. Includes decoding a mathematical equation and giving a 64-character.
When the problem is successfully decoded, a BTC block includes information on transactions which will complete the processing. Miners will be rewarded with coins from the computer network for their achievements. The difficulty of each problem will increase periodically to ensure the new coin is always created every 10 minutes.
More than 17 million BTC are released of 21 million BTC in total. The excavation will become more difficult, it is estimated that by 2140, the total of 21 million will be able to dig.
This currency can be broken down into many subunits. 1 BTC with 100 million Satoshi — Satoshi is the smallest unit of Bitcoin, named after the founder.
What is a blockchain?
Many people still match Blockchain and Cryptocurrency together, so when the BTC price drops from $20,000 to $5000, many people are “allergic” to the Blockchain phrase. For example, Blockchain as the internet platform, other services such as websites, online games, e-banking… are internet applications, in which Digital money in the banking system is as an online payment.
Similar to Blockchain, Blockchain will have applications such as Supply Chain, Review, Identity, Game, Cryptocurrency… And cryptocurrency is one of those applications.
So what is a blockchain? What is its role in the current economy?
Let’s go through our following series of articles to understand this new technology.
Imagine, you are the chief accountant in a small company, all operations arising in the period are recorded and saved in the secured C drive of the company computer. When you need any changes in numbers such as money transfer in and out, payment of orders … you will update on this ledger and you alone can see it unless you share it with a third person.
The blockchain is also the ledger, but this ledger is not saved on a machine that is stored on all machines in the company, including unrelated departments of computers such as security rooms … called the decentralized system — the distributed ledger system.
Blockchain is the public ledger for all transactions that have been done on its platform (for example, SHA-256 is an algorithm of Bitcoin).
Blocks are added to Blockchain in linear order (in a straight line), in chronological order. Each full node (ie each computer connected to the Bitcoin network used as a client, performs transaction validation and forwarding tasks) has a copy of the Blockchain, downloaded automatically when the miner joins Bitcoin network.
Blockchain has complete information about addresses and balances from genesis blocks — primitive blocks (the first transactions are done) to the most recent block completed.
Blockchain as a public ledger means that you can query any block (for example, https://blockchain.info/) for specific Bitcoin address transactions — for example, you have Find your wallet address to see the transaction you received your first Bitcoin.
Blockchain is considered to be Bitcoin’s main technology improvement, as it is a “no-confidence” validation mechanism for all online transactions.
Users can trust the public ledger system stored all over the world on various hierarchical nodes, maintained by miner-writers instead of third party maintaining and setting up (such as banks).
Blockchain is the structure for a new system of decentralized transactions based on non-trust, which is an important key of innovation. Blockchain allows non-intermediate and decentralized transactions of any kind between all parties on a global basis.
Blockchain is like another application layer running on an existing Internet protocol, adding a whole new layer to the Internet, allowing economic transactions, even payment by electronic money immediately (for some electronic currencies are commonly used) and in the long term, with complex financial contracts.
Any currency, financial contract, or intangible asset or tangible asset, can be traded with a system such as Blockchain. Moreover, Blockchain can be used not only for transactions, but also as a registration and inventory system for recording, tracking, monitoring and trading all assets.
A Blockchain is almost like a giant spreadsheet to register all assets, and an accounting system to trade them on a global scale, which can include all forms of assets held by all parties worldwide.
Therefore, Blockchain can be used for any form of asset registration, inventory and trading, including all areas of finance, economics, and money; tangible assets (physical assets); and intangible assets (Voting, ideas, reputation, intent, health data, etc.).
See the next article on Blockchain’s security from LINA’s Tech team.
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