Let's talk about cryptos. The entire world seems to be talking about it. But that's pretty interesting right, one investment option, one technology that has bind the diversed population on the entire globe together - you may or may not be a technology expert, you may or may not be a market analyst yet you believe in this, yet you have put your money on stake in this, yet you don't wana be left out in this revolution, yet you are on steemit. Quite fascinating..
I am not going to give any guru gyan here as to what prices can btc or any other alt coin touch .. because to be honest I don't know. Truly I want the price to grow by leaps and bounds - make me rich and then go stabilize bitcoin because you gotta be more stable to be used.
As the title of this post suggests, I wanna talk about the history of blockchain, the underlying technology. I mean, why in the first place we need anything like bitcoin. Yeah we all have heard about blockchain replacing the centralized banks but lets understand to one level more deeper. And I will try to keep it as simple as possible.
-> So, BLOCKCHAIN - what is it ? The most fundamental question.
Blockchain is known as “distributed ledger” technology.
Wow! Now that's a heavy statement. Let's break it down and try understanding it more.
Almost everything we do, may be purchasing a house, a car or using our credit cards, or simply buying a cart of beer, getting drunk and shouting on the road, "I love you bitcoin" - pretty much everything involves the creation and movement of data - okay not the shouting part, you are safe in that.
And this data is held in big lumps in one place -may it be a private server of a bank, a grocery store or a cloud server where you store your pictures considering them safe or even on paper in archives or libraries - the data is held in one place. And now the sad story is that your data is vulnerable - vulnerable to attack.
And there have been a lot examples lately. Uber database being hacked, U.S. credit rating company Equifax getting its security breached - and a lot more. The consequences of these hackings can be pretty high - theft, fraud, manipulation, suicide! Yes, you read it right and that actually happened a while ago when the hackers got into the database of an extramarital dating site Ashley Madison and published the data online.
-> So, Okay I can see that there's a big problem with our data, but can BLOCKCHAIN stop the breach?
Well that depends.. If you are going to keep your system's password as "password".. then I am sorry to tell you that blockchain can't help.
Hackers use brute force to get into your system, yeah technical experts, I know hackers hacking technique can be discussed in great detail but we'll do that in a separate post, - for the brute force part, blockchain makes it nearly impossible.
For the non technical steemians reading my post,
Brute forcing is nothing but an exhaustive search method in which you try all the possibilities to reach the solution of a problem.
So, what does BLOCKCHAIN does is that it breaks the database into tiny million pieces and spread and stored across thousands of computers or may be more. Now, instead of breaking into just one house and breach the security, the hacker needs to break into a whole town!
And that's where the "distributed" part comes in the definition. Each record being written into the blockchain is spread across the network in a web of interwoven chains of data. The more complex the structure gets, exponentially more secure our system becomes.
-> Ahmm.. can you explain more ?
Sure. We can say that everyone trades with everyone worldwide and this trading information is kept in book keeping and closed to the public. For this reasons we use middlemen and third parties to approve and verify our transactions - the banks, govt, notaries, the paper money in your wallet our all trusted third parties. This brings us to the essence of blockchain.
Blockchain enables a network of computers to maintain a collective ledger through the Internet. This book keeping is public and not in control of any one party and is available in one digital ledger which is fully distributed across the network. Each node in the blockchain owns the full copy of the blockchain.
For any transaction to take place successfully in the blockchain, it needs to be verified by the so called bitcoin miners. The mathematical functions involved make sure that each node in the network automatically and continuously agree about the current state of the ledger and every transaction in it.
If a hacker did somehow manage to break into one of the blocks and corrupt the transaction, the nodes will not arrive at consensus and hence will refuse to incorporate the transaction in the blockchain.
So every transaction is public and thousands of nodes unnanimously agree that a transaction has occured on a particular date and time of a particular amount. It is almost like a notary is present in each transaction. And this way every one has an access to a shared single source of truth and hence we can trust the blockchain.
For bitcoin you can see is like an incentive. A value token given to the people providing their computers processing power called "miners" to carry out the complex mathematical functions which are required to verify a transaction.
-> Seems seductive! But isn't it going to explode like the internet bubble.
Who knows. Blockchain is still young, still newer projects are coming up and more innovations are happening. There's a long way to go before we can predict anything so definitely. But I have one question, aren't we still using the Internet? Surely the stock prices rose too high but the technology behind them is still very much in use and we are fully dependent on it. So, can't it be possible about the blockchain? Don't you find the technology revolutionizing?
What do you think? Let me know in comments