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Blockchain: yes or no

Dima Bohatyrchuk
The technology was invented for the digital currency, - bitcoin. However, nowadays the technical community is looking for other potential uses for this technology. After all, they can be mass. By allowing digital information to be distributed but not copied, the technology of the block system created the basis. It is like a new kind of the Internet.

In the 21st century, it is complicatedly to follow all trends' growth, especially in the field of information technology, isn’t it? Since this is our work, we consider it our direct duties to acquaint you with the modern updates and knowledge in the field of IT. One of the newest and innovative ideas that have agitated the world of the IT industry is the blockchain, which quickly gained the trust of many and, therefore, is considered as a huge step forward and an incredible technological breakthrough.

Around it, there are many controversial discussions. A lot of us still have not a complete understanding of what it is. Nevertheless, its popularity and career opportunities haunt modern person's mind. It is the useful and necessary tool that affects the prospects of implementation and simultaneously has its flaws. So, we will talk about everything.

The technology was invented for the digital currency, - bitcoin. However, nowadays the technical community is looking for other potential uses for this technology. After all, they can be mass. By allowing digital information to be distributed but not copied, the technology of the blockchain system created the basis. It is like a new kind of the Internet.

Bitcoin is called digital gold not for nothing. To date, the total value of this currency is about $ 18.8 billion. Blockchain can create the other types of digital value. It is not necessary to know how the blockchain works, as well as, for example, the Internet or a car. However, the accessibility of basic knowledge about this brand new technology will allow understanding of why it is a breakthrough. On the one hand, the defined concepts provide insight into what is what. On the other hand, the deeper you go, the more questions appear. So, let’s go.

"Blockchain is an eternal digital distributed magazine of economic transactions, which can be programmed to record not only financial transactions but virtually everything that has value," - Don and Alex Tapscott, authors of the "The Revolution of the blockchain" (2016).

The blockchain technology can be used almost for all the areas of activities. Provide a table with information duplicated thousands of times in a computer network. Then imagine this network updating the table regularly. Consequently, now you already got a general idea of the blockchain. By the aid of it, people came up with a non-capable coin (bitcoin) and rapidly commenced the invention of a completely new financial ecosystem. So, blockchain is a tool that allows you to develop bitcoin.

Simply put, blockchain or block chain is a continuous sequential chain of blocks (linked list) that contains information. The most frequently copies of the chain of blocks are stored and independently processed in hundreds or even thousands of different computers around the world.

From a financial point of view, another definition is “the way of data stored or a digital register of transactions, contracts...” All that needs a separate independent record and verification, if necessary. You can store data on issued loans, property rights, traffic violations, and marriages. That is almost everything. It should be used anywhere if it is a necessity. Today we can see the spread of the blockchain in the medicine, document management, etc. And the scope of its implementation is growing every day.

Here's a simple example: the production and operation of the boats. They periodically need to be repaired. Each breakdown or malfunction, all information is recorded and stored in one of the blocks. In this case, of course, everyone can monitor it. Thus, there is the possibility of a direct determination of the history of a particular boat, what happened to it, to look at the documents for it.

Principles of the blockchain system

In fact, it is effortless to imagine what is a blockchain and what are the general principles of its work. Not even in IT. The noun blockchain by itself clarifies its content. It consists of the informational blocks linked by the complex cryptographic and chronological methods. The particularity of the structure is that each new block is added strictly to the end of the chain.

It implements a method of hashing data, which is an irreversible process. This is a kind of encryption. The number of the networking computers performs it. If the result is the same, then the block is assigned a unique digital signature. As a result, it leads to the creation of the new informational block. If this happens, it is no longer possible to change it (centralized). You can only add records.

All the users of the network have free access to a current version of the registry. It enables both a transparency for all participants and a complete security for data. As the blockchain keeps records publicly, it is easy to check them up. This information has no centralized version which could be damaged by the hacker. It is quite convenient.

What is the reason for such a high popularity?

Why did the blockchain system become so popular and burst into the confidence of the modern human mind? An answer is quite simple: there is a guarantee of carrying out the transaction. It is impossible to replace, edit, damage, or delete data from a new block. Under the sole condition, the creation is possible: it does not contradict the existing structure of the blockchain. Thus, everything is interconnected, and all the elements depend on each other.

The distributed nature of the blockchain databases makes hacking almost impossible because of the necessity of simultaneous access to the copies of the database on all computers in the network. This factor ensures 100% data security and minimal risks of hacking. You have to try very hard to get the system malfunctioning. At the core of the demand for a digital currency is a deficit. More and more people become able to understand, what are the tokens, bitcoins, and the blockchain. This provides the demand for it. Paying attention to the limits of any digital currency, and then with the growth of its demand, the cost of tokens rises. It means that the race of the exchange shows the digital deficit.

“Imagine that you have 1000 bottles of water for two people on hot days. The cost of it will decrease. But if you have just two bottles and many thirsty people around, the cost of its increases”, - Nick Spanos (Bitcoin Center NYC).

This is an additional indicator of the security of information in the blocks. In case 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. Despite the attractiveness of almost ideal at first glance technology, it still has its drawbacks. The most serious of them is a required enormous computing power for the possibility of using blockchain technology. In addition to this, not all block-based solutions can scale and match the load.

Blockchain excludes any intermediaries (people or the companies) because the system works on the mathematical algorithms. And that’s the future. So, we are approaching the digital society. If you intend to implement a blockchain system and use it in your project, you first need to think about the necessity for this. Is it worth for your product to be on the blockchain, will it bring the desired result to the business/company? Analyze the ability of your system to use the block system and its advantages, consider the power.

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