Blockchain: Why there is so much hype about it.

Blockchain is a technology based on which Bitcoin is built on . But there are, perhaps, dozens of other ways to use blockchain in isolation from crypto-currency. There are daredevils who call the blockchain the main technological breakthrough since the invention of the Internet.

 

What is it?

If you do not deepen into the technical nuances, then the very principle of blocking is quite simple. It can be represented as a discount book, which each participant of the event has and which is constantly updated. In fact, in this book, you can enter any event - from financial transactions with crypto-currencies Bitcoin, Etherum, etc. to the results of voting in presidential elections or identification data.

The blockchain feature is that the pages (blocks) of this book are simultaneously stored by all users of the network, are constantly updated and refer to the old pages. And if someone tries to deceive the system by tearing out or pasting a page into the book, then the system immediately turns to tens of thousands of other versions of this book and discovers a discrepancy in the structure of the blocks.

 

How it works?

The basic blocking system is a constantly growing sequence of blocks that are shared between participants using peer-to-peer networks that most people use to download and distribute torrents.

A time stamp (hash sum) is added to each block, which is the easiest to imagine as a unique fingerprint. These blocks are strictly in a certain order added to the chain"). If you try to rearrange the sequence of blocks, the system will reject the chain due to a mismatch between the structure and the hash sum.

So that no one can change the time stamp and recalculate the hash amount, which will be correct from the point of view of the system, the blockchain uses several methods of protection: Proof of Work (PoW, proof of work) and Proof of Stake (PoS, proof of possession).

 

Why is there so much hype about it?

All these tricks give a lot of buns for the users of the system. Participants in the transaction can not deceive each other. It does not need intermediaries like a bank. There is no central node in it, destroying which you can knock down the entire system. All operations are transparent to its participants since all data is entered into one database.

 

Written by Irene Parsons