Blockchain is a way of storing data or a digital register of transactions, transactions, contracts. All that needs a separate independent record and, if necessary, verification. In the blockroom you can store data on loans issued, property rights, traffic violations, marriages. That is, almost everything. Its main difference and undeniable advantage is that this registry is not stored in any one place. It is distributed among several hundreds and even thousands of computers all over the world. Any user of this network can have free access to the current version of the registry, which makes it transparent to all participants.
Blockchain - the public database of all transactions that have ever been committed in the system. Widely used is also the term "block" as "transliteration from" (English blockchain, block chain: block, chain).
The distributed nature of the Blockchain databases makes hacking hacking almost impossible, because for this they need to simultaneously access the copies of the database on all computers on the network. Technology also allows you to secure personal data, because the hashing process is irreversible. If even the original document or transaction is later changed, they will receive a different digital signature as a result, which signals a mismatch in the system.
Digital records are combined into "blocks", which are then linked cryptographically and chronologically into a "chain" using complex mathematical algorithms. Each block is associated with the previous one and contains a set of records. New blocks are always added strictly to the end of the chain.
Internet commerce is becoming more popular every year, but it is hindered by the threat of hacker attacks and distrust of partners by competing with traditional business. This problem is solved by the new database technology - Blockchain. These databases do not have a single control center, operations are confirmed by other network members, so they are immune to hacker attacks and allow verifying the truth of information about a partner - this is the future of Internet commerce.
Blockchain is a database, that is, an electronic information store, similar to an entry in an Excel file. For example, in bank bases it is written how much money lays on accounts, and in a database of police - who and when broke rules. A similar principle here, unlike traditional databases, in Blockchain the information is not in a single store, but is written to each participating computer on the network. Blockchain technology registers transactions in such a way that they can not be deleted or rewritten afterwards, the information is only consistently updated. Therefore, the data is written in the form of a chain of updates, not a table. You put 100 dollars on the account, and a database with this information appeared in the database. Then you sent someone $ 50 and put another 100. But in the first block information about the amount of money will not change by 150 - two new blocks with updates will be added. Each of them has its own code, indicating a link to the previous and next blocks.
Collect and update this information so-called miners - active users, who for their work receive cyber-currency fees Bitcoin.
Every day there are news that some hacker has stolen money from bank accounts or cracked a celebrity email. This is because information is easy to access. And Blockchain makes the theft of information impossible. If the hacker inserts a fake between existing blocks, the system will notice the substitution - the code for the new block will be different from the sequence of the others. Changes in the blocks themselves also affect the code, and thus any changes are immediately noticed by the miners. Overwrite the entire chain will not work, because Blockchain is a distributed database, and information is stored simultaneously on thousands of computers. Even if information changes on one, other users will notice a substitution - they have some original data stored.
The protection of information is especially important for banks: in the format of figures in the cells of databases they store money. If an attacker changes this information, he can steal money from accounts or disrupt the bank's work.
When the seller and the buyer plan to make a deal, they are looking for an intermediary who follows the integrity of the agreement. In financial transactions, the intermediary is the bank: it guarantees that the money will not go anywhere and will reach from the payer to the recipient. Also, the bank issues a confirmation of payment - it does not matter whether it is about paying a gas bill or buying a factory. For this, financial institutions record transaction information in their databases. We use their services, because this is the most reliable variant of mediation.
But the technology of data storage Blockchain allows you to do without intermediaries. Imagine, you want to pay for the goods from the online store and make a transfer through Blockchain. In your data chain there will be an entry that the money is listed to the store - then you have confirmation. Money transfer is "seen" by all network members, and it will be reflected in the update of your data. In the process of transfer it is impossible to steal money or erase a record, because the system is immune to hacking. The store also knows that the translation is real, because if you had forged a data block, the system would have noticed it and deleted the fictitious entry. Everything is the same as in the bank, but you do not need to pay an intermediary for services. With this approach, banks are not needed, and given the increasing popularity of Internet commerce, Blockchain is able to compete with traditional payment systems.
In March 2014, a new version of Blockchain, which allows you to not only record payments, but also record information. It can be used to compile open databases - for example, land cadastres, or register contracts online, because an open database allows you to check information about a partner.
Also in Blockchain you can register goods and other valuables. For example, a car buyer will receive from the seller a chain of data about the car to make sure that the car is bought legally, and not stolen, is not secured, and so on. In these cases, Blockchain will replace the business of intermediaries, notaries and even government agencies. But to make the replacement equal, users should be sure that there is all possible information in the database.
The Ledger system completely returns to the times of ancient history. Their main purpose was to act as a means of storing information for accounting purposes, so that it was easily accessible to the persons concerned. The advent of computer technology, new cryptographic developments and complex mathematical algorithms allowed the distribution of books. The idea of these distributed registers is relatively new, as well as Blockchain technology. Let's look at the similarities and differences between the two databases.
In fact, the distributed book is a complex database that covers many countries, institutions, users and even sites. They are completely decentralized to eliminate the need for a central regulatory body or intermediaries, such as lawyers, notaries, regulators, compliance officers and even banking institutions. All data and information stored in the distributed book can be authenticated and confirmed by participants in the distributed book, which are called nodes in the book.
Information can only be added to the distributed book as soon as it is confirmed by all participants, once a general consensus has been reached on the network. This is done to ensure security, immutability and transparency. In addition, all data in the decentralized book is recorded with a timestamp and is accompanied by a distinctive cryptographic signature or key, if you can. In addition, they are designed in such a way that everyone can view all the information in the register, such as dates, time, transaction history. This ensures that all data is always accurate for audit purposes and does not have hiccups in reality. Distributed registers are ideal for maintaining a defenseless ecosystem without the need for certain third parties.
It is very important to understand that Blockchain is just one type of distributed book. Many people do not know that there can be many different types of block circuits with different characteristics. This is partly due to the popularity of Blockchain, associated with bitkoy, eclipsing others. Block circuits operate on the basis of a consistent, replicated, synchronized and common digital data system. For example, once a transaction occurs in a block bitlock chain, the miners hasten to check the transaction by resolving a cryptographic algorithm using computer processing power. Once the transaction is verified, it will be affixed and added to the Blockchain block with other operations, which are then linked to other blocks using a unique cryptographic signature known in cryptomania as a "hash".
In addition, all information about Blockchain can be easily accomplished using a cryptographic hash key and is confirmed by anyone who has access to the Internet. Blockchains have different mechanics, such as mining, special permits, private and public block chains. Nevertheless, all such Blockchains are built on the concepts of crypto and bitcoins.
Distributed registers and block circuits are definitely overlapped in cases of use, as well as terminology. In fact, distributed registers can be synchronized and implemented with or without Blockchain and its underlying mechanisms. A great way to wrap your mountain around everything that was discussed is to think that Blockchain is a replicated database or even a magazine. This means that identical copies of its data are stored on each node of the network. Although in a distributed book, individual nodes may have different information pertaining to different data and activities.
In summary, the differences between block chains and distributed books are relatively thin and usually boil down to a consensus model that is used to verify, store and copy data. Now, although the differences are subtle, it is wise not to confuse the two systems, because in the end they mean different things. In addition, a distributed book can be associated with Blockchain for specific purposes.
Today, technology has a tremendous impact on the fundamentals of the economy, business and the state. They change people's understanding of the trade, ownership and interaction of market players.
Changing business models has led to a need for technology that can ensure the transparency and security of all related processes - Blockchain.
How did the Blockchain technology come about? In 2008, Satoshi Nakamoto created Bitcoin, an electronic payment system based on cryptographic confirmation instead of "trust."
And although in 2016 the world's leading media 117 times announced that Bitcoin is dead, today we see that it is not. Yes, this market is still unstable due to the absence of a regulator, which would take responsibility in case of currency collapse. But the main thing that Bitcoin brought to the world is Blockchain technology itself.
Blockchain vigorously discussed at the recent World Economic Forum in Davos. Bankers from Wall Street are beginning to invest in crypto-currencies and Blockchain technology.
Governments of different countries (Japan, China, Australia, the United States, EU countries, etc.), including Ukraine, are testing this technology for its introduction into the state administration.
The US government announced the holding of a forum on blockade in July this year. The State Department and the Office of General Services (GSA) will act as the direct organizers. The forum should help in developing a plan to combine the efforts of government agencies and ministries in promoting Blockchain technologies.
As more and more participants in the global logistics market are puzzled by increased transparency and reliability of supply chains, leading IT companies are promoting the idea of using blockchain technology for this purpose.
Thus, the international IT company IBM has already offered some large companies from various fields of activity to test their developments based on the principle of blockchain.
The International Blockchain-Consortium Hyperledger was launched by the Linux Foundation in 2015 and currently unites more than 115 companies from various fields, including finance, automotive, healthcare, IoT and aviation. The main goal of the consortium is to create a single blockchain-platform with an open source code that will allow organizations around the world to introduce blockchain technology into their business processes.
The WalMart retailer was one of the first to believe in the bright future of blockchain, he is testing a new IBM technology for mango supplies in the US and pork in China. The company believes that its implementation will increase the efficiency of inventory management and ensure the safety of food supplies that WalMart considers particularly important after the outbreak of salmonellosis in 2006. At that time, when using paper workflow, the company took about two weeks to identify the source of the infection. Blokchein will provide full information about any batch of goods entered in the database in seconds, say supporters of technology.
Transparency of the supply chain will also benefit end-users who can be sure of product safety, its freshness, lack of GMOs and unwanted additives. Or, to know for sure that the tuna bought was not obtained by poaching, in order to protect itself against such accusations, blockchain was used by the British startup Provenance. The company, using blockchain technology, monitors the movement of tuna, controlling its fishing and shipping.
EverLadger uses a blockchain in the supply chain to confirm the source of origin in the diamond trade.
Startup Assetcha.in with blockchain improves the security of storing valuable items.
The company Midasium with the help of blockchain concludes in an on-line regime agreements on the rental of housing in the real estate market.
More than a year, the start-up Yojee (Singapore) is already running.
The technology platform, which provides powerful logistics capabilities in supply chain management, uses artificial intelligence and blockchain technology. It replaces the dispatcher, monitors the status of orders in real time, generates accounts, manages tasks. The company claims they are already working with 30,000 vehicles and customers from Singapore, Australia, Cambodia and Indonesia.
Blockchain will also help in the fight against fraud and delivery errors, as one of the important advantages of the technology is the simultaneous updating of information from all participants of the logistics chain. At Maersk, which has begun testing the technology on several container line routes, it is already preparing to receive a multi-billion dollar savings with the successful implementation of the detachment. Imagine: 90% of the foreign trade turnover in the world is delivered in containers. At the delivery of each of them, on average, 30 links of the logistics chain (including shippers, consignees, carriers, customs, fiscal, controlling bodies) are involved, between which there are more than 200 units of information interactions. It is assumed that each of the links in the chain will be able to record each entry in the circuit using a smartphone, and this will eliminate the need to design tons of shipping documentation at each stage of the journey. The introduction of digital technology for the exchange and storage of data in real time could make a real breakthrough in supply chains.
The technology will help to measure not only the location, but also the temperature, humidity and power supply status in real time.
Since 2016, the Port of Rotterdam, Europe's largest commercial port, is testing the Blockchain logistics technology, and this could be the starting point in developing the level of transparency in the industry. The project has the support of more than fifteen public and private sector companies based in the Netherlands with the assistance of the Ministry of Economic Affairs.
According to the creators, this blockchain project is unique in that it covers the entire logistics supply chain.
Over the next two years, the members of the consortium will test the applications for the exchange of logistical and contractual information between the parties.
Banking organizations continue to invest in block projects. IBM Institute for Business Value (IBM Institute of Business Value) with the support of the Economist Intelligence Unit conducted a study in which 200 banks from 16 countries took part and told about their expectations from the technology of blocking.
According to the results of the survey, in 2017, 15% of financial institutions will use the block in their practical activities. It is these banks that are innovators who believe that technology will help them create new business models and launch in new markets.
Banks-innovators believe that the blocking company will help them reduce time, costs and risks in such areas as reference data, retail pyments and consumer lending. Also, innovators are convinced that the block will open new opportunities in the areas of trade finance and corporate lending.
The results of the research demonstrated that the introduction of blocking technology is happening at a faster rate than previously expected.
Innovators identified the main areas where the implementation of blocking will be most effective at first.
The technology of blocking is different from the traditional database architecture or the very principle of organization. The databases used on the Internet, as a rule, are based on the client-server architecture. In contrast, the introduction of blockchain provides for the principle of the absence of a single server and the equal participation of all users.
When using a standard database, a user who has an account and a password to it can modify the records stored on the centralized server. Whenever he accesses the server through his computer, he sends an updated version of the information. The very control of the system is in the hands of the administrators who control its work.
In the blockhouse everything is arranged differently. After updating the data on the network, one of the participants uses all its nodes to confirm these changes. All information is stored on the computers of all users, and not on a single server, which ensures the protection of the system from threats of hacking and cyber attacks.
This makes the block system an ideally suitable storage system for information under certain conditions in various applications, where conventional databases are not the best option.
Block technology allows different parties that do not trust each other to exchange data without the participation of a central server. Transaction processing is carried out by users of the network, which play the role of a consensus mechanism.
The sense of the development of decentralized control in eliminating the risks of network centralization. When using a centralized database, anyone who has access to it is able to destroy, damage or change the information stored in it. In this situation, users are completely dependent on the server administrators.
In addition, securing centralized databases requires considerable cost and effort to maintain their security. For example, banks spend billions of dollars on maintaining current defense systems and new developments to counter potential cyberattacks. If administrators of a centralized system lose to hackers in this fight, then first of all the losses are borne by customers whose confidential information has become public.
Most centralized databases store information that is relevant at a particular time. They represent a kind of snapshot of this moment.
Blocking allows you to store the data currently relevant, as well as all information that relates to previous periods. The block chain is capable of storing the history of itself. Such databases grow and constantly expand the archives of their history, as well as provide a picture of the current situation in real time.
Although block technology can be used to record and store information and is an ideal platform for transactions, it is considered slow compared to traditional databases. Especially if you put it in a single row with technologies used in such payment networks as Visa and PayPal.
Despite a significant increase in productivity, the nature of the block chain also requires some victims. In particular, we are talking about speed. Distributed blocking technology means that the network does not work by combining the processing power of all nodes. Each of them functions independently in it, comparing the results of their work with other participants, until a consensus is reached about the changes that have taken place.
Centralized databases, in turn, have been used for more than a decade. Their productivity has increased significantly with the help of the formula used to determine innovation in the era of the digital economy, the so-called Moore law.
Blocking is an uncontrolled network. In fact, anyone can complete and add a new block to the platform based on the block chain and read it.
A block chain, like a centralized database, can be managed using a read and write system. This means that the network or protocol settings can provide for the possibility of making entries only by registered participants.
But, if confidentiality is the only goal, and trust is not a problem, then from this point of view database projects based on the blockbuster do not have advantages over a centralized way of storing information.
Hiding information in a block chain requires a large amount of cryptographic encryption, which is fraught with high computing load on network nodes. It is impossible to do this more efficiently than just completely hide the necessary information in a private, centralized database that does not even require an Internet connection.