Understanding Blockchain Technology | Marked votes

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Blockchain is the technology that enables the existence of cryptocurrency (among other things). Bitcoin is the name of the most famous cryptocurrency, the one for which blockchain technology, as we know it today, was created. A cryptocurrency is a medium of exchange, for example the US dollar, but it is the case of digital and uses cryptographic techniques and the entire protocol to verify the transfer of funds and control the creation of monetary units.

What is blockchain technology?

A blockchain is a decentralized ledger of all transactions over a peer-to-peer network. Using this technology, participants can confirm transactions without the need for a central clearing authority. Potential applications may include money transfers, settlement of trades, voting and many other issues. Blockchain technology has benefited from widespread interest in Bitcoin and other cryptocurrencies. Given today’s falling Bitcoin price, the future of the blockchain technology that underpins cryptocurrencies is uncertain.

A typical list of positive aspects when discussing blockchain technology includes:

Trust and reliability

Decentralized management

Transaction transparency

Traceability

Simply put, it represents a computer ledger (think ledger that records all “in” and “out” transactions). The ledger is distributed. In other words, there are many copies of the same ledger on computers around the world. It is also protected by strong cryptography that works against malicious actors trying to tamper with the information in the blockchain.

How did this technology appear?

In 1992, W. Scott Stornetta and Stuart Haber proposed the idea of ​​blocks of digital data linked together using cryptography to prevent tampering with time-stamped documents. In 2008, an anonymous person named Satoshi Nakamoto proposed a new payment system to a group of prominent cryptographers and mathematicians via a cyberpunk mailing list.

The proposal for Bitcoin: Peer-to-peer electronic payment systems are based on a cryptographically verified distributed ledger and operate via a “proof of work” consensus mechanism, the same technology used to combat spam. The proposal did not mention the concept of blockchain. The term was later coined with reference to the proposals from Stornetta and Haber. Today, Bitcoin is used in transactions, investments and gambling, more about that at Gamblineers, a comprehensive guide on these matters.

How is new data added to the blockchain?

Each computer (or node) synchronizes data through a consensus-based mechanism. Once data is added, it cannot be added or changed on the blockchain unless consensus is reached. There are many types of blockchain databases. The main types are open and closed or private blockchains.

What’s in store for this year?

The demise of FXB (Foreign Exchange Bureau) and the subsequent collapse of Bitcoin vividly illustrated how the technological capabilities of blockchain technology could be exploited to achieve the exact opposite of its stated benefits. FXB has undermined Bitcoin’s credibility. The decentralized potential of blockchain technology can easily be turned into centralized control by those in power. This happened at a time when technology platforms dominated the internet, despite the internet’s decentralized infrastructure. Blockchain enthusiasts often cite the following use cases: supply chain execution, financial transactions, identity verification, electronic medical records, elections and real estate transactions;

Blockchain technology is technically promising. Whether these opportunities will materialize in 2023 remains to be seen.