What is blockchain? Blockchain technology is one the recent changes in our world that is just beginning its far-reaching effects. You may have noticed the term creeping into business discussion more and more. This article will explain blockchain technology so that you’ll have a basic understanding of what it is and how it benefits you. Don’t fret; it seems amazingly complicated, and in a way, it is, but the basic concept may be easily understood.
In a basic definition from Don and Alex Tapscott’s book, Blockchain Revolution, the blockchain is “an incorruptible digital ledger of economic transactions that can be programmed to record. This recording includes not just financial transactions but virtually everything of value.”
How the Blockchain Works
- The blockchain is like a huge, global, decentralized spreadsheet, meaning no one system is the “Central” authority.
- It keeps track of who sent how many coins/tokens/information sets to whom.
- In the case of Coins/Cryptocurrency, it tracks the balance of every account.
- It is stored and maintained by thousands of people (miners) across the globe who have high-powered and uniquely configured computers.
- The blocks within the blockchain are made up of all the individual transactions sent and received through the blockchain. For instance, all individual transactions sent from places like OMINEX, MyEtherWallet, MetaMask, Exodus, Mist, Geth, Parity, and everywhere else.
- When you access your Cryptocurrency Balances on Ominex.com, any other Blockchain Wallet, or view your transactions on various and specific sources like etherscan.io, blockchain.info, etc., you are seeing data on the blockchain. You are not seeing data in any one personal system.
Benefits of the Blockchain
Blockchain is a system (decentralized) to bring everyone to the highest degree of accountability, resulting in the following benefits:
- No more missed or corrupted transactions.
- An end to human or machine errors. No more corrupt or broken databases.
- An end to transactions or exchanges (made in error) without the consent of the parties involved.
- The blockchain guarantees the validity of a transaction by recording it not only on a main register, but on a connected distributed network of registers. All of which connect through a secure validation protocol.
Blockchain Technology as an Evolution of the Internet
The blockchain is an undeniably ingenious invention. It is the brainchild of a person or group of people known by the pseudonym Satoshi Nakamoto. But since then, it has evolved into something greater. You may be still asking the question “What is blockchain?” Hang on, and we will further explain blockchain.
Digital information on blockchain is distributed, but not copied. It creates an endless, constantly updated and accessible database. Hence, blockchain technology created the backbone of a new type of internet. This improvement is better for everyone globally. Originally devised for the digital currency, Bitcoin, the tech community is now finding other immediate and potential uses for blockchain. Everything we saw happen with the Internet changing commerce and how things are being done and communicated is now evolving into a blockchain revolutionary method.
Due to recent validation of Bitcoin and the creation of blockchain, Bitcoin has been called “digital gold.” That seems to be a great name for it; as it has proven to be just that. To date, the total value of the currency is close to $350 billion US. (probably far more by the time this is read). And it doesn’t stop there, as blockchains can make other types of digital value.
User Friendly Blockchain
Like the internet before blockchain or your smartphone, computers, or your car, you do not need to know how the blockchain works for you to use it. However, having a basic knowledge of this new technology helps you to understand why it is considered revolutionary.
A Distributed Database – let us explain the blockchain details even more:
The distributed database is what makes blockchain so revolutionary. In a simplified manner, picture a spreadsheet that is shared thousands of times across a vast network of computers. Then, realize that whenever a secured and validated version of any update is processed, this network is designed to regularly update this spreadsheet. If you can grasp this concept, you have a basic description and understanding of blockchain. Some benefits to this process and function include:
- Information held on a blockchain exists as a shared and continually validated and reconciled database.
- The blockchain database is not stored in any single location, meaning the records it keeps are truly public and easily verifiable.
- No centralized version of this information exists for a hacker to corrupt.
- It is Hosted by millions of computers simultaneously. Its data is accessible to anyone on the internet.
- It provides ultimate security and transparency: Truth.
Blockchain Details: Durability and Robustness
Blockchain technology is similar to the Internet in that it has a built-in robustness. By storing blocks of information that are identical across its network, the blockchain boasts these safeguards:
- It cannot be controlled by any single entity.
- It has no single point of failure.
- It cannot be corrupted or embezzled.
Historical Details of Blockchain Invention/Creation:
Bitcoin was first invented in 2008. Since that time, the Bitcoin blockchain has operated without significant disruption. To date, any of the problems associated with Bitcoin have been due to hacking or mismanagement. This indicates that problems come from bad intention and human error, not flaws in the underlying concepts.
The Internet itself has proven to be durable for well over 40 years. This is a track record that bodes well for blockchain technology. It continues to be developed and deployed for all uses and solutions for the global community in which we all live and work.
Blockchain Details on Being Transparent and Incorruptible
The blockchain network lives in a state of constant consensus. Therefore, it is one constant consensus that automatically checks in with itself every ten minutes. This is a kind of self-auditing ecosystem of a digital value. The network reconciles every transaction that happens within ten-minute intervals. Each group of these transactions is referred to as a “block.” As a result, here are two important properties created by blockchain technology:
- It is transparent. Data is embedded within the network as a whole. By definition it is public.
- It cannot be corrupted. To alter any unit of information on the blockchain would mean using a huge amount of computing power to override the entire network. That is something that is virtually impossible and becoming a larger and larger barrier constantly.*
*In theory, this could be possible. In practice, it’s unlikely to happen. Hence, taking control of the system to capture Bitcoins, for instance, would also have the effect of destroying their value.
Blockchain Details: A Network of Nodes
A network of computing “nodes” make up the blockchain.
A node is a computer connected to the blockchain network using a client that performs the task of validating and relaying transactions. The node gets a copy of the blockchain, which gets downloaded automatically upon joining the blockchain network.
Together these nodes create a powerful second-level network, a wholly different vision for how the Internet can function.
Nodes and Their Role in the First Blockchain Example: Bitcoin
Every node is an “administrator” of the blockchain and joins the network voluntarily. (In this sense, the network is decentralized.) However, each one has an incentive for participating in the network: the chance of winning Bitcoins (competing to solve and be verified as the solution), proving proof of work, and then creating the “minted” blockchain of information and being rewarded a specific number of bitcoins for the completed block in the blockchain.
In its early days, the Internet was once just a way to share “emails” and information. It grew into massive commerce, jobs, and revolutionized industry. Similarly, as a result of blockchain, that quality of transformation is happening again. It is evolving to the next level of technology based on decentralized solutions and “truth.”
There are ever-growing Bitcoin-like cryptocurrencies (exchangeable value tokens) already available. In addition, there is a full range of other potential adaptations of the original blockchain concept that are currently active or in development. Because there are literally no barriers, the uses and deployed solutions will be a part of our everyday lives (if not already) in the immediate and ever-advancing future.
Blockchain Details: The Idea of Decentralization
The blockchain is a decentralized technology, as it was originally created.
Anything that happens within the blockchain is a function of the network as a whole. Hence, some important implications are now realized by this:
- By creating a new way to verify transactions, certain aspects of traditional commerce could become unnecessary.
- Cryptocurrency and ICO/Token trades become almost simultaneous on the blockchain. This capacity could make possible a global economy of trade operating 24/7/365 with no market opening or closing.
- Vital record keeping, like a land registry, is now fully public.
- A global network of computers uses blockchain technology to jointly manage the database, which records the recorded and structured transactions. That means that information is up-to-date and available at all times.
The blockchain is managed by its network, and not any one central authority. To add definition, “decentralization” means the network operates on a user-to-user (or peer-to-peer) basis. Therefore, this creates “truth,” and the possibilities from all forms of mass collaboration this makes possible are just beginning to be investigated.
Blockchain Details: Who Will Use the Blockchain?
Keep in mind; you do not need to know about the blockchain for it to be useful in your life. Like computers, they have been enhancing everything around us with or without our knowledge of them and how they function. Currently, finance offers the strongest use cases for the technology, in international remittances, for instance. As a result, the World Bank estimates that over $430 billion US in money transfers were sent in 2015.
Jobs and careers are abundant in the blockchain. At the moment there is a high demand for blockchain developers. This is not going to slow down. Therefore, implications for evolving into the blockchain is relevant for virtually everything.
Because of its relevancy, the blockchain potentially cuts out the middleman for all types of transactions. Therefore, new methods for generating and being part of creating new monetary gains are expanding exponentially.
Access to the financial sector and use of blockchain cryptocurrencies became open to the general public with the invention of “wallet” applications. These were first used by people to buy things with Bitcoin, and to be able to store and access it along with other cryptocurrencies. We recommend OMINEX for any blockchain wallet or ICO direction, need, or resource.
In addition to many things and industries created by the blockchain, this created a huge need for compliance, identification, and verification. OMINEX (Go Here for Access) is the leader in blockchain-compliant solutions and user “wallets” for cryptocurrencies.
Blockchain Details: Enhanced Security
The security, validation and “Truth” offered by blockchain is revolutionary and necessary for total global solutions in all sectors. By storing data across its network; the blockchain eliminates all of the risks that come with centrally held data.
Especially relevant to today’s needs, the blockchain lacks centralized points of vulnerability that computer hackers can exploit. Today’s internet has security problems that have plagued all of us. We all rely on the “username/password” system to protect our online identity and assets. Blockchain security methods use encryption technology. Therefore, Internet security, along with almost all aspects of the Internet, has evolved with blockchain.
These methods of encryption are known as public and private “keys.” A “public key” (a long, randomly-generated string of numbers) is a user’s address on the blockchain. Values (such as Bitcoins, or any cryptocurrency or designed variable) are sent across the network and are then recorded as belonging to that address. The “private key” is like a password that gives owners access to their Bitcoin, other cryptocurrency, or other digital assets. When you store your data on the blockchain, it is incorruptible. This is true, although protecting your digital assets will also require safeguarding of your private key.
Methods for safeguarding include these two:
- Printing it out and creating what’s referred to as a paper wallet.
- Cold Storage Solutions, such as a Trezor, allow you to keep your “Public Key” and its contents as you access them from the blockchain in a safe location with built in and secure recovery points.
Blockchain Details: A Second-Level Network
Due to blockchain technology, the Internet (web) now benefits with a new layer of functionality.
Hence, users can transact directly with one another — Bitcoin transactions in 2016 averaged over $200,000 US per day. With the added security brought by the blockchain, new internet business are on track to completely disrupt the traditional institutions of finance. When you check the latest figures in Market (showing you the hundreds of Billions being traded in Bitcoin), you’ll be amazed at the speed of growth.
As published in 2017, Goldman Sachs believes that blockchain technology holds great potential, especially to optimize clearing and settlements of financial transactions. They claim it could represent global savings of up to $6 Billion per year. From our current perspective, it seems like even Goldman Sachs has underestimated this incredible new world of blockchain.
Joining the Blockchain Adventure
Joe Withrow, Bonner & Partners’ Head of Research, says, “Venture capital (VC) is flooding into blockchain companies. …. $5.6 billion poured into blockchain companies last year[2018]. That’s a 419% increase over 2017… And it’s up from just $1.5 million in 2011.” Cryptocurrency and blockchain technology are part of a maturing industry pulling billions from serious investors.
While blockchain is applied to far more than cryptocurrencies (supply chains, online communications, etc.), cryptocurrencies are our easiest way to participate.
Want to be a part of the future? Become a Miner of Cryptocurrency on the blockchain in the easiest manner possible. You do not need to fully understand it or put any capital at risk. VISIT HERE for the details on how you can safely and securely use your computers (when you are not using them and they would be otherwise idle) to benefit and earn Bitcoin (though you will be part of mining the most productive forms of cryptocurrency). SEE THE DETAILS and get STARTED HERE. This is literally creating the possibilities of millionaires among even the simplest and non-understanding of us out there. And it is real.
Blockchain can be a lot to take in. So we invite you to bookmark this page and come back to review this information and to see any updates. If this article whetted your appetite for more, be assured there is nothing but growth and adventure for us all to witness. Subscribe to the right so we can keep you up to date with the new blockchain technology, services, and fun to be had by us all.
Response Magic