ACI Partners: Blockchain, Bitcoin, Ethereum and Smart Contracts – What It Is and how It Could Affect UsFebruary 20, 2018
Blockchain technology, along with the Internet, could be regarded as one of the most important inventions of the last century. Basically, blockchain could be able to solve one pressing need: ensuring financial interaction without middlemen, for example sending money via internet without trusting a central server. A central server or, in other words, a bank.
Confidence is a key element, if one needs to transfer money electronically. As far as the banking system in the West is concerned people are used to trust the system which operates fairly well. But in other parts of the world, the banks are not delighted with the same trust like in the West.
Vitalik Buterin, inventor of Ethereum, one of the cryptocurrencies, also being discussed later, commented: “Blockchain solves the problem of manipulation. When I speak about it in the West, people say they trust Google, Facebook, or their banks. But the rest of the world doesn’t trust organizations and corporations that much — I mean Africa, India, the Eastern Europe, or Russia. It’s not about the places where people are really rich. Blockchain’s opportunities are the highest in the countries that haven’t reached that level yet.” Quoted from here.
The main purpose of the pioneers of Bitcoin, one of the first decentralized digital currencies and most renown one, was to create a system without middlemen like banks and without fees. Furthermore, they wanted to make transactions more transparent and impede manipulation.
What is Blockchain?
In this article, we may not discuss how the blockchain works in all its technical details, but rather give a general overview about the technical possibilities and how it may affect us.
The blockchain was invented by Satoshi Nakamoto. The identity behind this name is still unknown. It has not yet been clarified, whether Satoshi Nakamoto is a group or a single person.
Blockchain was originally founded for Bitcoin, but there are also other areas where it can be used.
Blockchain provides an open decentralised database of any transaction involving value like money, property, goods, but also work and votes. It is imaginable that even elections could be held by means of blockchain technology.
The blockchain is a network consisting of many computers, well said a chain of computers. If someone wants to conduct a transaction all these computers must approve this transaction before getting verified, recorded and distributed on a public ledger. But publicly, does not mean unsecure. The transaction is saved on a public digital ledger, but with a use of cryptography it is possible to keep the exchanges secure.
Blockchain technology offers many advantages. It allows consumers and suppliers to connect directly, without any middleman. Blockchain technology makes the database decentralized, which excludes the possibility of it being easily corrupted.
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