What is Blockchain?

2017-08-28 00:00:00:

Blockchain is the newest technology, the interest in which has grown along with the popularity of cryptocurrencies. Today it is widely discussed not only in the world of finance - they are trying to use it for storing and processing personal data and identification, in marketing and computer games.

         Literally translated, a blockchain is a continuous sequential chain of blocks that contain any information, built according to certain rules. Blockchain is also called the technology of distributed ledgers, because the entire chain of transactions and the current list of owners are stored on their computers by many independent users. And even if one or more computers fail, the information will not be lost.

         Interest in the blockchain as a phenomenon and method, on the one hand, is also caused by the popularity of bitcoin. But bitcoin, in the mass consciousness, is most often associated only with prohibited and persecuted by lawmakers. This negative vision is shaped by the prejudice that only illegal or even criminal financial transactions need privacy, and for everything else, there are a great many e-wallets and all kinds of bank and credit cards.

         The blockchain is essentially just a tool with which you can store transaction data, that is, a kind of database. And a tool, which is quite obvious, cannot in itself be known to be good or bad: with the help of an ax, you can go and chop wood, or you can take the same ax and reduce the population of usurers in a particular city. The tool is the same, the application and the consequences are different.

         There are many areas of application for blockchain, the main thing is that there is an analogue of a transaction or similar interaction, a partnership between the parties. Therefore, Bitcoin and Litecoin are now working on blockchain technologies, banks are very actively looking at the blockchain (in the fall of 2016, Bank of America and Microsoft announced the beginning of the development of a financial blockchain platform).

         The very first real deal with real money also took place in the fall of the same year - an Israeli startup (Wave), a British bank (Barclays) and an Irish dairy producer (Ornua) held a letter of credit for $ 100,000. And if earlier the process would have taken a week or more due to bureaucracy and verification of all documents, then thanks to cryptography and automated verification, everything about everything took about four hours.

         The main advantages of using blockchain are the transparency of the transactions and multiple copying of all these transactions in such a way that each participant in the process always has information about every step of all partners. But at the same time, all users always have a different level of access to these files. Someone can only enjoy the views and view the list of files in each folder. And someone, namely the addressee of a specific file, can download the data for himself. Moreover, no one else will be able to access the file - only the one to whom it was originally intended. This ensures the proper level of openness of the transaction - the entire chain of transactions is duplicated and stored in an unchanged encrypted form by each participant, it will not be possible to somehow falsify it.

         Just like bitcoin, the blockchain is decentralized and does not have any one common "command center", hacking which will destroy all data about the transaction and its participants or somehow replace them. And hacking one of these computers will not affect the safety data on the rest, as well as on the changes made.

         It is possible that now is the very time when the technology is being tested live in very significant areas of public life, and soon we will see more and more projects and platforms using blockchain. Even now, many banks are trying to actively implement this at home, including to reduce operating costs, and more and more new players are appearing on the market seeking to popularize the use of technology.

         The advantages of the blockchain are openness, security and safety, so it will be a good help for any services where users might worry about possible fraud or data safety. In just a few years, the blockchain has already gone from a novelty in the technological world to a tool that large banks, corporations and states are beginning to use. This only strengthens the confidence that in the future the technology will reveal its potential even more and will be used everywhere.

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