How does the BlockChain work and how can we use the BlockChain ?
The technology behind Bitcoin and all the other Altcoins is the Blockchain.
But these cryptocurrencies are just one of the many ways we can use the Blockchain.
Simply said, we will use the Blockchain to replace the factor TRUST in everyday life.
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Now we give a third party our trust, that a transaction will be executed in a honest way like sending money from A to B, or that we will be paid once we deliver ordered goods to another party.
Explaining how the blockchain works in a way everyone will get it, is quite a challenge, but I'll give it a try….It is called BlockChain because every transaction or mutation is a block which is encrypted and placed in a chain.
So to make changes a hacker would have to change the whole chain or hack all the computers at once because the information is on a decentralised ledger.
The BlockChain was introduced in January 2009 together with Bitcoin by a person or group called Satoshi Nakamoto whose real identity is still unknown.
The BlockChain solves the problem of Double Spending.
If I send a picture or a word file to someone else, I still have the original on my computer: this is called Double Spending.
But by using the BlockChain I can really send a file to someone else and the original is no more in my possession and this mutation is forever locked into the blockchain.
So every (financial) transaction can be put on a blockchain and the middlemen will no more be needed.
It is also called a peer-to-peer electronic (cash) system by Satoshi Nakamoto in his white paper.
The BlockChain is the most important ( IT ) invention the world has seen since the internet itself.
Some call it as important as the invention of print or agriculture.
We can hardly imagine that, but what did most of us know about internet, or had any idea how it would affect our lives in 1994 ?
This is the stage we are in now with the blockchain, and almost every day I see another application popping up. I will sum up some of them here.
The most simple example is sending money without cost or at very low cost. Now middlemen like Western Union, banks and other money exchanges charge a high fee. One of the reasons many people are forced to do do is because 2 billion people are still unbanked meaning that they have no bank account. But what most people do have is a smartphone and internet access so they can receive crypto money.
ECommerce on the blockchain: now a purchase can be regulated from A to Z without encountering human errors.
Ownership of land and real estate: Once your land or real estate is in the blockchain no one can confiscate your property
Digital Identity: avoid that your identity is used by others
Blood Diamonds: by labeling diamonds you will know that it is not a blood diamond
Digital Voting: avoid that an election is being manipulated
Medical files: Keep your medical history and file on the blockchain without the possibility that unauthorised people can look into your medica data
Music and other content: let users pay you directly for your intellectual property without a publisher or other third party
These examples are just a few applications for the blockchain and I will go into them in my next posts.
I hope you have a better idea now how important this technological invention will be for mankind.
Danny
Great post Danny