With advancement in globalization and civilization, is the growing need for a more secure and effective means of communication, data processing, data storing, data sharing, and data redistribution among individuals and organizations alike. Blockchain is realizing dreams. The world is becoming a digital sphere with daily innovation and inventions sprouting from all corners of the earth. This article focuses on one of the greatest inventions ever made.
This article is about Blockchain!
History of Blockchain
Firstly, the idea of Blockchain was first introduced by Stuart Haber and W. Scott Stornetta in 1991. They recognized a flaw in the time stamp of documents. The pair recognized that often at times, timestamps on a document were altered making it difficult to know the date the document was first created or was modified.
Secondly, in 1992, Merkel tree was introduced into the design by Bayer, Haber and Stornetta. This was a major boost to the project as it allowed multiple files to be imprinted on each block. This meant that each block could store more than one file before it is permanently stored.
Finally, Satoshi Nakamoto conceptualized the Blockchain in 2008. Nakamoto went further to make Blockchain a primary component to the working of the first ever cryptocurrency Bitcoin. Nakamoto made the Blockchain a public ledger system for all transactions on the Bitcoin network.
Furthermore, Bitcoin on introduction became the first digital asset to solve the age long problem of double spending without the presence of a centralized authority to govern assets.
In August 2014, the bitcoin blockchain file size, containing records of all transactions that have occurred on the network, reached 20 GB (gigabytes). In January 2015, the size had grown to almost 30 GB, and from January 2016 to January 2017, the bitcoin blockchain grew from 50 GB to 100 GB in size. Read more
What is a Blockchain
People often ask: What is block chain technology? What can block chain be used for? What is a Blockchain in Bitcoin? How does Bitcoin block chain work?
Blockchain is arguably the world’s best and leading virtual platform for digital assets. The Blockchain allows users to create digital assets of great value online. These assets after creation are stored in Blockchain and can never be deleted. The Blockchain also makes it possible for these assets to be shared and/or transacted between individuals and organizations globally. It has a well decentralized and secures system that allows accountability thrive. Just as the assets cannot be deleted, sharing history and transaction history also can never be erased from the system.
Blockchain is a public accounting system that a ushered in cryptocurrency creation and transactions. Bitcoin being the first ever cryptocurrency hosted by the Blockchain has over the years proven to be a great achievement. Trading the Bitcoin and all other numerous cryptocurrencies has been possible only because of the concept of Blockchain.
How is Transaction Recorded in Blockchain?
As stated earlier, the Blockchain was originally created as a virtual accounting system to host the Bitcoin. The Blockchain makes accounting secure and reliable with the Distributed Ledger Technology (DLT). The Distributed Ledger Technology is at present, used to confirm transaction within the cryptocurrency environment. The DLT on its own is becoming a focus of commercial organizations seeking improved accounting processes with their firm.
Transactions are recorded in a chain formation. Each transaction is added to an already existing chain of previous transactions. This record keeping system is chronological in order and can never be altered. By this, any transaction you carried out yesterday will be saved in a block form and piled up in a chain like formation to the previous day’s transactions. This process continues forever.
Transaction Storage and Accessibility
The Blockchain keeps elongating as long as transactions keep coming. Market participants can monitor digital currency transactions without hiring an accountant. Each market participant is connected through his or her computer device to the network. This makes tracking your investment a click away. You can monitor your asset or bid for assets from anywhere in the world. Asset originality/authenticity can also be confirmed by user within the Blockchain community. Unlike the conventional practices where you have to contact various agencies and even security organizations to confirm whether an asset is valid before purchase. After every transaction, duplicated copies of the transaction details are automatically downloaded by the Blockchain as evidence of transaction validation.
Very worthy of note, recent transaction/Information is stored in a “block”, once transaction is complete this information is moved to a permanent database. Once transaction details are moved to the permanent database, it is stored forever and the block is instantly attached to the chain of previous blocks (previously completed transactions). The blocks are linked to each other in a perfect line and chronological order forming a chain. Just like the normal chain you wear, each block contains a part or hash of the previous block. Blocks (transactions) are added through cryptography to existing blocks. This ensures that they are not tampered with.
- Data permanently added to the Blockchain database can only be distributed, but not copied.
- Once a “block (transaction)” is successful and is added to the Blockchain database, no more work can be done on it. Another block cycle automatically begins for a new transaction to be recorded.
Save and Secure Blockchain?
People are often careful of online trading since anyone one can claim any ones identity. Questions always arise about measure taken to protect users from fraudsters and identity theft in Blockchain.
Remember, anything introduced into blockchain can never be deleted. It is possible to digitalize code and insert literally any document into the Blockchain. By introducing any document or materials into Blockchain, it makes it indelible and cannot be changed. This fact does not cover cryptocurrencies only. User data collected from inception is also stored in the database and this reduces duplicity.
The Blockchain stores complete information about every user. Ranging from addresses to their balances right from their first ever transaction (block) to the most recently completed transaction (block). Cryptocurrencies are currently undertaking KYC (know your customer) policy globally. Hence, adequate information about all users is paramount before allowing them to own an account and by extension crypto asset.
“The Blockchain 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 Blockchain Revolution (2016)
“The traditional way of sharing documents with collaboration is to send a Microsoft Word document to another recipient, and ask them to make revisions to it. The problem with that scenario is that you need to wait until receiving a return copy before you can see or make other changes because you are locked out of editing it until the other person is done with it. That’s how databases work today. Two owners can’t be messing with the same record at once. That’s how banks maintain money balances and transfers; they briefly lock access (or decrease the balance) while they make a transfer, then update the other side, then re-open access (or update again).With Google Docs (or Google Sheets), both parties have access to the same document at the same time, and the single version of that document is always visible to both of them. It is like a shared ledger, but it is a shared document. The distributed part comes into play when sharing involves a number of people.
Imagine the number of legal documents that should be used that way. Instead of passing them to each other, losing track of versions, and not being in sync with the other version, why can’t all business documents become shared instead of transferred back and forth? So many types of legal contracts would be ideal for that kind of workflow. You don’t need a Blockchain to share documents, but the shared documents analogy is a powerful one.” William Mougayar, Venture advisor, 4x entrepreneur, marketer, strategist and Blockchain specialist.
Blockchain is an amazing invention with a great array of possibilities for both domestic and international businesses. The measure of the success level of the Blockchain has climax many times over. It’s accountable, decentralized and secure systems are a major catch for governmental and non-governmental organization globally.
However, the ever-growing size of the Blockchain is considered by some to be a problem, as the issues of storage and synchronization is steady rising.