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I hope it helps. A blockchain is a new type of database. A traditional database sits on a server somewhere. There's only one version of it. A blockchain is different because it's decentralised. What does this mean? With a blockchain, there are multiple, identical copies of the same database on different servers around the world.
When new records are added to the system, all the copies of the database are updated so they match up. Each new set of records is called a block. Each new block links to the previous block in a chain stretching back over time. Once blocks are added it's impossible to retrospectively alter them. Blockchain is significant because it allows strangers to exchange something of value without going through a trusted third party. Let me give you an example. Say I'm buying a property. Certain formalities are completed and payment is made.
At this point, a central database called a land registry, operated by the government, is updated to show ownership has been transferred. This works fine in a country like the UK, but problems can arise in places where land registries are incomplete or poorly managed. Having a central database allows for mistakes and outright corruption, as records can be altered to deprive legitimate owners of their property. What if the land registry was a blockchain? This would means lots of identical copies of it would be held on different servers, in different locations, controlled by different people, independent of government.
In this scenario, my property purchase bitcoin block explorer apical pulse rate be added to all the different copies of the land registry.
It would rapidly become impossible for that record to be changed by anyone, including an errant civil servant. Even if someone managed to alter the record on one bitcoin block explorer apical pulse rate two servers, bitcoin block explorer apical pulse rate would be immediately apparent to everyone.
The same decentralised approach can be applied to payments. Did you pay for coffee with your card this morning? There were several trusted third parties involved such as Visa that ensured that the money was debited from your account and credited to Starbucks. Without this guarantee, no retailer would accept cards. The downside is that each third party takes its cut of every transaction.
A blockchain system holds out the promise that Starbucks can accept an electronic payment from you with no need to involve any expensive third parties. In the same way that a merchant accepts cash without first insisting on going off to the bank to get the note checked out. Which brings us neatly to Bitcoin. Bitcoin is a new type of currency, and represents the first practical implementation of blockchain technology. Remember though that blockchain can be used for almost any bitcoin block explorer apical pulse rate, not just Bitcoin.
Most currencies are issued bitcoin block explorer apical pulse rate a central bank. A central bank has total control over its currency. It can declare one bitcoin block explorer apical pulse rate that virtually all banknotes are worthless, bitcoin block explorer apical pulse rate example, as happened recently in India.
Electronic transfers of money can only be undertaken by commercial banks, and central banks have overall control of them. All this engenders trust in the financial system. Bitcoin is a currency that is not issued or controlled by any central body. It can only work this way and still be trusted because all transactions go through a blockchain. The Bitcoin blockchain is a giant ledger that records all Bitcoin transactions.
As with my hypothetical land registry, this ledger is held and updated by multiple servers globally. This means it cannot be tampered with and it's impossible to spend the same individual Bitcoin twice.
Going back to the coffeeshop, if Starbucks were prepared to take Bitcoin, it could sell you coffee without involving any banks or other third parties. Bitcoin is referred to as a cryptocurrency because it uses cryptography secret codes to validate transactions and keep them private. This has tarnished the reputation of blockchain in general.
As the value of Bitcoin continues to rocket, more and more new cryptocurrencies or coins are being created. Bitcoin mining is a method for rewarding people who provide computing power for the network with newly issued currency. There are more efficient ways of achieving the same goals in a blockchain system.
The mainstream financial services sector is the most obvious candidate for adopting blockchain. Financial institutions are constantly transacting with each other.
They see a huge opportunity to strip out intermediaries and save costs and time using blockchain or similar technologies the R3 banking consortium is one of the big players in this area. Blockchain could also revolutionise financial services for individuals. Take people who work abroad and send money home. Start-ups like Abra use blockchain to let people transfer money abroad via their phones, quickly and with much lower sending fees. Lots more opportunities for blockchain lie in bitcoin block explorer apical pulse rate many situations requiring secure, inviolable record-keeping.
We already talked about using blockchain as a way of recording property titles. This is being piloted in places like the country of Georgia, Honduras, and Sweden. Similar applications include identity management. For example, a company called ShoCard is developing blockchain-based digital identity cards that cannot be tampered with.
Healthcare records are another possibility, academic certificates, the list goes on. Ethereum is a blockchain that lets people tap into the power of this network by creating something called a smart contract.
A smart contract is a contract that executes itself. No need for lawyers or executors to get involved. One area smart contracts bitcoin block explorer apical pulse rate be applied to is music. Mycelia, set up bitcoin block explorer apical pulse rate singer-songwriter Imogen Heap, is exploring how to use blockchain to give musicians better control over their music and ensure they get properly paid.
This could involve storing all music rights on a blockchain rather than relying on multiple databases as is the case today. Smart contracts would be used to grant access to songs in digital format, take payment and then automatically distribute it amongst creators. The smart contract concept can be taken even further with something called a Decentralised Autonomous Organisation DAOwhich is a company that operates itself according to a set of smart contractswithout the need for human management.
Ponder the implications of that for a moment. Investors are certainly putting plenty of money and faith in it. There are concerns around security, privacy, scalability and governance that could prevent wide adoption of blockchain, at least in the short term.
Make of that what you will. Nevertheless, the promise of reducing costs and cutting out intermediaries means blockchain will surely make progress in time. Financial services bitcoin block explorer apical pulse rate a shoo-in given the size of the prize when it comes to cost savings.
Using blockchain for secure record-keeping could reduce administration costs and increase trust, particularly in emerging economies. Whatever happens, there will be an increasing level of commercial involvement and regulatory oversight of blockchain systems.
The Bitcoin dream of a world without government control may fade away, but blockchain is here to stay. What exactly is blockchain? What is the connection between Bitcoin and blockchain? What other applications are there for blockchain beside cryptocurrencies? Is blockchain really such a big deal?