About a year ago, the Blockchain Witness Cult emerged and made a big announcement. A lot of people, including enthusiasts with burning eyes and swindlers (guess who is the most), voted in every way about the imminent coming of Blockchain the Almighty, who will change the world forever.
Absolute transparency of transaction chains through a distributed register will make payment systems and even central banks of entire countries unnecessary.
What’s with the transactions? Notaries will no longer have to certify their documents, cargo carriers will stop cheating on their routes, because the data from GPS sensors will be transmitted directly to blockchain, and so on and so forth. Wherever the world is imperfect, you just need to add blockchain – and enjoy the result.
Unfortunately, neither enthusiasts nor crooks were able to explain the magical qualities of blockchain. All the more so, no one wanted to talk about the drawbacks, except for one thing – the lack of performance, which makes the technology temporarily unsuitable for mass transactions (by mass transactions we mean at least a couple of tens of thousands of transactions per second).
And at the end of 2016, the technology was somehow silenced. The swindlers split up (not all of them, but most of them), and the enthusiasts got serious. It’s time to find out what blockchain is and why it really can change something.
Literally, blockchain translation is a chain of transaction blocks. Each blockchain contains information about its predecessor. The information cannot be changed imperceptibly. At the moment, it is considered impossible at all.
After the transaction data have been “visaed” by several miners (some kind of controllers working for a moderate payday), the block is literally cast in granite. Its content is not encrypted and is available in an open form, but is cryptographically protected through hash chains. The database publicly stores unencrypted information about all transactions signed using asymmetric encryption.
I don’t see any point in telling you how it all works, you can read about it in a separate article that explains the mechanism literally on your fingers. But the bottom line is this: in theory, we get an absolutely reliable and knowingly trusted database, where no one can get in with their dirty paws.
It is impossible to imitate a transaction by showing a fake payment. You can’t say that you paid on time, it just took a long time to get the money. They say that even with the bank sometimes you can agree – but with blockchain is not possible: you can immediately see who you are. All moves are written down forever. And what is typical, without any participation of the state authorities.
Not so fast.
Blockchain experts say that using a distributed registry reduces transaction time from days to minutes. And that’s true. With one small caveat: as a rule, we are talking about complex transactions involving many objects and subjects at once. Roughly speaking, if we buy an island with development, its presence in a distributed database, such as blockchain, saves us a lot of time.
Instead of dozens of people digging through the papers and finding out the status of land, buildings, burdens, and at the same time checking the authenticity of the papers themselves, blockchain would allow us to get this information very quickly.
And it wouldn’t cause any doubts. The goods have been checked, the money has arrived, the new owner is registered in the next block of the chain (and yes, here we as though forget about preliminary work thanks to which the full information about the island has got in blockchain).
Blockchain is flesh from the flesh of the Bitcoin system, and there it was initially started that it takes 10 minutes to create one block, regardless of the speed of the equipment.
Plus, every blocks are corrected, which also takes time. In more traditional centralized systems, such a transaction takes some funny fraction of a second. But yes, there is no transparency, and there is nowhere without Big Brother.
The cherry on the cake is a very significant (and constantly growing) amount of data accompanying each transaction. When megabytes of data are thrown back and forth for every dollar, any computer system will be strangled.
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