A short note on Block Chain

What is Block Chain: The block chain is an undeniably ingenious invention – the brainchild of a person or group of people known by the pseudonym, Satoshi Nakamoto. But since then, it has evolved into something greater, and the main question every single person is asking is: What is Block chain?

A reliable, difficult-to-hack record of transactions – and of who owns what. Block chain is based on distributed ledger technology, which securely records information across a peer-to-peer network. Although it was originally created for trading Bit coin, block chain’s potential reaches far beyond crypto currency. Block chain ledgers can include land titles, loans, identities, logistics manifests – almost anything of value. The technology is still new, but the potential impact it can have on business is exciting, and immense.

By allowing digital information to be distributed but not copied, block chain technology created the backbone of a new type of internet. Originally devised for the digital currency, Bit coin, (Buy Bit coin) the tech community has now found other potential uses for the technology.

In this guide, we are going to explain to you what the block chain technology is, and what its properties are what make it so unique. So, we hope you enjoy this, What Is Block chain Guide. And if you already know what block chain is and want to become a block chain developer please check out our in-depth block chain tutorial and create your very first block chain.

“The block chain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” – Don & Alex Tapscott, authors Block chain Revolution (2016).

Block chain Explained:

 

A block chain carries no transaction cost. (An infrastructure cost yes, but no transaction cost.) The block chain is a simple yet ingenious way of passing information from A to B in a fully automated and safe manner. One party to a transaction initiates the process by creating a block. This block is verified by thousands, perhaps millions of computers distributed around the net. The verified block is added to a chain, which is stored across the net, creating not just a unique record, but a unique record with a unique history. Falsifying a single record would mean falsifying the entire chain in millions of instances. That is virtually impossible. Bit coin uses this model for monetary transactions, but it can be deployed in many other ways.

Think of a railway company. We buy tickets on an app or the web. The credit card company takes a cut for processing the transaction. With block chain, not only can the railway operator save on credit card processing fees, it can move the entire ticketing process to the block chain. The two parties in the transaction are the railway company and the passenger. The ticket is a block, which will be added to a ticket block chain. Just as a monetary transaction on the block chain is a unique, independently verifiable and unfalsifiable record (like Bit coin), so can your ticket be. Incidentally, the final ticket block chain is also a record of all transactions for, say, a certain train route, or even the entire train network, comprising every ticket ever sold, every journey ever taken.

But the key here is this: it’s free. Not only can the block chain transfer and store money, but it can also replace all processes and business models that rely on charging a small fee for a transaction. Or any other transaction between two parties.

Here is another example. The gig economy hub Fever charges 0.5 dollars on a 5 transaction between individuals buying and selling services. Using block chain technology the transaction is free. Ergo, Fivver will cease to exist. So will auction houses and any other business entity based on the market-maker principle.

Even recent entrants like Uber and Airbnb are threatened by block chain technology. All you need to do is encode the transactional information for a car ride or an overnight stay, and again you have a perfectly safe way that disrupts the business model of the companies which have just begun to challenge the traditional economy. We are not just cutting out the fee-processing middle man; we are also eliminating the need for the match-making platform.

Because block chain transactions are free, you can charge minuscule amounts, say 1/100 of a cent for a video view or article read. Why should I pay The Economist or National Geographic an annual subscr iption fee if I can pay per article on Facebook or my favorite chat app? Again, remember that block chain transactions carry no transaction cost. You can charge for anything in any amount without worrying about third parties cutting into your profits.

Block chain may make selling recorded music profitable again for artists by cutting out music companies and distributors like Apple or Spotify. The music you buy could even be encoded in the block chain itself, making it a cloud archive for any song purchased. Because the amounts charged can be so small, subscr iption and streaming services will become irrelevant.

It goes further. Ebooks could be fitted with block chain code. Instead of Amazon taking a cut, and the credit card company earning money on the sale, the books would circulate in encoded form and a successful block chain transaction would transfer money to the author and unlock the book. Transfer ALL the money to the author, not just meager royalties. You could do this on a book review website like Good reads, or on your own website. The marketplace Amazon is then unnecessary. Successful iterations could even include reviews and other third-party information about the book.

In the financial world the applications are more obvious and the revolutionary changes more imminent. Block chains will change the way stock exchanges work, loans are bundled, and insurances contracted. They will eliminate bank accounts and practically all services offered by banks. Almost every financial institution will go bankrupt or be forced to change fundamentally, once the advantages of a safe ledger without transaction fees are widely understood and implemented. After all, the financial system is built on taking a small cut of your money for the privilege of facilitating a transaction. Bankers will become mere advisers, not gatekeepers of money. Stockbrokers will no longer be able to earn commissions and the buy/sell spread will disappear.

 

How Does Block chain Work?

Picture a spreadsheet that is duplicated thousands of times across a network of computers. Then imagine that this network is designed to regularly update this spreadsheet and you have a basic understanding of the block chain.

Information held on a block chain exists as a shared — and continually reconciled — database. This is a way of using the network that has obvious benefits. The block chain database isn’t stored in any single location, meaning the records it keeps are truly public and easily verifiable. No centralized version of this information exists for a hacker to corrupt. Hosted by millions of computers simultaneously, its data is accessible to anyone on the internet.

The Three Pillars of Blockchain Technology:

 

The three main properties of Block chain Technology which have helped it gain widespread acclaim are as follows:

1. Decentralization


2. Transparency


3. Immutability