I constantly hear about "Bitcoin" and "blockchain". What is it about ?
Let's start with the basics. Bitcoin is a crypto currency, a digital version of assets like gold.
In 2017, its cost has skyrocketed. Blockchain - the underlying technology. This is a powerful concept, potentially capable of radically changing the world.
But what is this?
Blockchain is known as the "distributed registry" technology. Almost everything we do - recover from illness, buy houses, pay with a credit card, vote in elections, travel by car or use public transport - is accompanied by the creation and movement of data.
Blockchain -is a new way of storing and moving this data, where information is not stored in one place, but is distributed to thousands of nodes of the network, connected with the help of smart cryptography. This structure creates many interesting new opportunities, to which we will return soon.
Wait a minute. And why revolutionize the storage of information? What's wrong with how we store information now?
Currently, the data controlling our lives, for the most part, are stored in large bundles in one place, whether on a private server, in the cloud or on paper in libraries or archives. In most cases this is normal, but a vulnerability to burglary is possible.
Recently it became known that in 2016 hackers hacked Uber and stole personal information 57 million users. You probably heard about hacking - and the subsequent publication of online data - 37 million users of the Ashley Madison dating site in the same year. And more recently, the American credit rating company Equifax, which stole personal data from 143 million US consumers, including social security numbers and, in some cases, license numbers and even bank card data, was hacked.
Such hacking can have serious consequences, because millions of people become vulnerable to theft of personal data and fraud. The personal nature of the data stored by Ashley Madison exacerbated the problem, causing at least two suicides.
Blockchain could interfere with this?
Optional Blockchain can not prevent hackers from penetrating your computer system if your password is "123456". But in other cases, hackers use the "brutfors" method to attack the system-the passwords passage, whose success depends only on the computing power of the attackers, and the blockchain makes it practically impossible.
"The Internet was created to share information," said Jamie Smith, CEO of Blockchain Business Council and communications director for BitFury's leading technology blockchain. - This information needed to be stored somewhere, so there are countless databases in the world. They can be imagined as a house. It is difficult to penetrate the house, but perhaps, and cybersecurity is just a set of ingenious ways to protect this house. "
The technology blockchain breaks the database into a million tiny particles that are distributed among thousands of computers. "Instead of breaking into the house," says Smith. "Now you need to break into every house in the whole city."
Is this the "distribution"?
Exactly. Each part of the structure - whether a currency unit, such as bitcoin, an unmanned vehicle navigation system, medical history or voting results - is distributed over a network of interlaced data strings. As the complexity of the system increases, its safety grows exponentially.
Cleverly
This is just the beginning. The system is also capable of self-testing and self-healing. Computers participating in the blockchain help to maintain its integrity by verifying and verifying a series of transactions - blocks - which then form a chain in which the history of each data unit is encrypted. Since the blockchain is constantly self-checking, the data contained in it is unchangeable. Even if a hacker succeeds in hacking a block, any changes made to it will immediately become visible.
In order for participants to sacrifice computing power, various blockchain-based systems, such as Bitcoin, offer motivation in the form of tokens. Bitcoin - this is just a cost token, issued in exchange for the amount of processing power. This process is called "mining", and its idea is set forth by the inventor Bitcoin Satoshi Nakamoto in the famous white paper Bitcoin.
Nakamoto believed that with the right motivation, the network "based instead of trust on cryptographic evidence, allowing the two parties to interact directly with each other, without the need for a trusted third party", is able to grow organically, and the more participants in the network, the more capacity for its maintenance. Today, computers that are engaged in mining in Bitcoin's blockchain perform almost 5 quintiles of encryption operations - called "hashing" - per second.
It seems to be a lot
This is indeed so. On Earth, there is no supercomputer capable of performing 5 quintillion operations of hashing per second. This is more than the 500 best supercomputers in the world combined. It also uses an astounding amount of electricity - Bitcoin's mining now consumes more electricity than Ireland.
Keep in mind that direct comparison is difficult. The power of supercomputers, measured in floating-point operations per second (FLOPS), is not directly comparable with the hash per second. It's like comparing torque and horsepower - a tractor might be more powerful than a Ferrari, but it will not be able to drive as fast. Bitcoin in the near future will not beat Deep Blue in chess; he is not fit for this. But still nothing of the kind existed before.
It seems that this Satoshi is an intelligent guy. Who is he?
We do not know. The personality of Satoshi has always been a mystery. In different years different people pretended to be for him, but none of them could confirm this, and it was also supposed that in fact it was a group of people. Those who were considered the most likely candidates, all stubbornly denied, and now around him (or her or them) there are so many myths that, perhaps, it is better not to know.
But we know that Satoshi is connected with the community of cypherpunk , the community of cryptographers, programmers and thinkers, who at the end of the 20th century thought about better approaches to confidentiality, information and power. In their ranks were the developer of anonymous web browser Tor Jacob Applebaum, the founder of Wikileaks Julian Assange and the creator of the distributed file sharing system BitTorrent Bram Cohen.
BitTorrent? This is the program with which my cousin downloads pirated series "Games of Thrones"?
Yes Yes. Cohen realized that instead of exchanging entire files, they can be broken into small parts so that people download them in parts from each other and from the source. In this sense, BitTorrent has common spiritual roots with a blockchain.
These guys remind anarchists.
Anarchists and libertarians, mostly. Blockchain is attractive not only because of its security. It is potentially capable of completely changing the functioning of society.
For cypherpunks , according to Steve Bellowin, a professor of computer science at Columbia University in New York, it was an "ideal solution." Crypto-currencies, in one form or another, existed since the 1980s, but their creation or management was centralized. The simple and subtle idea of Satoshi was to decentralize them.
"You do not need to trust governments or banks - it's perfectly suited to this kind of mindset," Belnovin said. This resonated in the dream of the cypherpunks about an unhindered, or almost unhindered, world economy where money can travel around the planet without having to go through intermediate points controlled by governments or monopolistic companies. "
I bet big banks do not like it
Some of them are concerned. In particular, the bitter critic of Bitcoin was Jamie Dimon, CEO of J.P. Morgan. Someone says that the rise in Bitcoin's price is a bubble that will burst sooner or later. But now there is a big stir around blockchain, and banks are also not without enthusiasm. Initial coin offering (ICO), through which new crypto-currencies are issued, have become insanely popular.
But not all of them are legal. In November 2017, the US Securities and Exchange Commission opened a fraud case against the organizers of ICO PlexCoin. Just two days later, the participants of the site for the crypto-currency NiceHash found that the site was hacked and increased more than $ 60 million in bitcoin. Security blockchain, like any technology, depends on its users.
But, a minute, can not you check the registry and find hackers?
Theoretically, yes. Although at an early stage Bitcoin enjoyed the reputation of a tool for criminal activities, such as drug dealing or money laundering, it was due to a fundamental lack of understanding of what it anonymized and what did not. Given the availability of resources - and the ability to make cryptocurrency exchanges to give out to which users belong to one or another address - it is possible to track bitcoins much better than paper dollars.
So do not use Bitcoin for illegal activities; he is not anonymous.
I did not mean to.
That is great.
Nevertheless, despite these troubles, blockchain in 2017 gained massive popularity, and the cost of Bitcoin and Ethereum for the year increased tenfold.
Ethereum? And what's that?
Ethereum is the second largest blockchain. It is much smaller than Bitcoin - the market capitalization of its crypto currency token, ethereum, is $ 39 billion (April 9, 2018), compared to a quarter of a billion dollars in bitcoin - but Ethereum allows you to integrate smart contracts into your blockchain."If I download a program, for example, a bet, I reserve a certain amount for it, you also reserve a certain amount, and then a third party tells us whether the Chicago Bulls or the New York Knicks have won, determining the result of our bet,"explains Joseph Lubin, one of the creators of the Etherium.
According to Lubin, Ethereum should become not just a crypto currency, like Bitcoin, but a full-fledged corporate platform on which programmers can create applications for all sorts of purposes. Despite this, the price of one ethereum rose from $ 8 in January 2017 to $ 800 in December of the same year, as investors felt that you can earn a lot of money here.
And what's next?
Blockchain will increasingly be accepted as a standard - at least in terms of security. As a basis for the currency, it will encounter difficulties, but most major banks now have departments specializing in crypto-currencies, and some are thinking of creating their own private blockchain.
Some countries are also thinking about this. Georgia created a blockchain-system for maintaining the land cadastre. Some US states are reportedly considering a pilot project to transfer voting to the blockchain. It is rumored that the blockchain will be used to enhance the security of the New York Stock Exchange. Walmart, Nestlé and Unilever are considering using blockchain to support their supply chains.
There is still a long way to go. Tim Draper, a venture capitalist and investor in Bitcoin, believes that sooner or later« Bitcoin will become the main source of money. Blockchain will be used to identify and protect contracts. It will be so widespread that people will constantly use it, not guessing about it».
It may not be soon. The price of bitcoin may continue to grow - or it may collapse tomorrow and cause chaos in the market, provoking the reaction of regulators. The future is behind the blockchain, but this road can pass through the peaks.
Source:http://telegra.ph/CHto-vy-hoteli-znat-o-Bitkojne-no-stesnyalis-sprosit-05-06