Blockchain, decentralisation, and finteha technologies that are fashionable today are stirring up the minds of the powerful of this world. Bitcoin is bad, blockchain is good! This is the opinion of the domestic regulator, which, like all centralized bodies, takes the following approach: “The masses have something new there, I don’t know what it is, but just in case it is forbidden.
There is a lot of hippie around blockchain startups today, and really no one really understands why this is happening, where and how it will be applied, and what will happen out of it.
But, faithfully, they understand that this is the second serious revolution after the Internet, and do not want to miss it. Many crypto-enthusiasts believe that blockchain has no independent value without bitcoin, because blockchain is simply a technology for the secure transmission of digital cash and a guarantee that there will be no double expenditure and no counterfeiting of the crypto-active.
Indeed, the collective unconscious under the pseudonym of Satoshi Nakamoto has not used blockchain to track tuna from sea to table, nor has it used blockchain to preserve and maintain a record of documents, or to store information on bullets and weapons.
He used blockchain only to operate Bitcoin. Whether or not blockchain is privately owned and of value without Bitcoin will be shown by time. For the purposes of this article, we will talk in plain language about the technology as a whole and how it can be used.
Blockchain (Blockchain) is a decentralized database that is resistant to malicious and erroneous manipulation attempts and is designed to store information in an orderly and time-sensitive manner.
Historically, it was first used in 2009 in the Bitcoin cryptocurrency as a mechanism for storing transaction history, where on the one hand it provides the possibility of making new entries into it by any user (provided there is a non-zero balance in the system and a certain amount of computing resources and power), and on the other hand – the uniqueness of the database for all its users.
Types of tasks for which blockchain can be used
In general, blockchain technology is justified when there is a need for a storage mechanism that meets the following requirements at the same time:
Blockchain-based storage is almost always more reliable than centralized storage: even in the event of complete or partial failure of individual system components, the system as a whole remains operational.
In Bitcoin cryptocurrency, for example, hundreds and thousands of nodes are switched on and off daily, but the network itself continues to operate non-stop for 7 years.
Blockchain-based databases, by definition, are capable of being used by many users by virtue of their distribution, and due to the fact that, as a rule, every full-fledged user of the system acts as a custodian and source of information at the same time, the speed of reading from the database does not increase in the first approximation as new users are added.
In distributed databases, as a rule, there are problems with maintaining the uniqueness of information – due to the fact that any member of the network must be able to add information to the database, there is a risk of many different versions of the same database as a result of erroneous and/or malicious use.
Blockchain technology eliminates such problems by using PoW (Proof of Work), PoS (Proof of Stake) and other blockchain-specific algorithms to verify the correctness of the received database instance.
Binding data to time
Blockchain-based databases store data in the form of a sequence of data blocks, the order of which is determined by the time of their addition: thus, changing the order of their location is virtually impossible.
As a consequence, for any database record there is a possibility to determine the time of its addition with the accuracy specified during the database creation, which is extremely important for a number of applications.
For example, when creating a cargo transportation database, this approach allows you to ensure that the cargo first arrived at point A and only then at point B, and any attempt to falsify the record will almost certainly be doomed to failure.
Resilience to attempts to falsify data by system participants
Databases built using blockchain technologies have the property of being resistant to attempts to falsify the data they contain: since for a new entry to be accepted by the system it is necessary to have the consent of 51% of users of this system, it is almost impossible to enter false data into the system.
This makes it possible, in particular, to create settlement systems in which the participants are not able to trust each other in full or even in part.