What is the Blockchain?
Blockchain is a hot topic around the globe today. It along with Bitcoin and digital currency has become a subject of discussion in many newspapers and in people’s conversations. However, when talking about blockchain is still much controversy. There are people who worries that Bitcoin may be just a bubble, many suggest that the technology behind it is a disruptive technology, and that technology will continue until it is accepted and integrated with the Internet.
According to Rosic (2016) and Marvin (2018),in 2008, a cryptographer who goes by the pseudonym Satoshi Nakamoto created a crypto-currency called bitcoin. Bitcoin is digital currency that allows you to perform peer to peer transactions without the help of a third party such as banks that we often used. Furthermore, a blockchain is an anonymous online ledger that uses data structure to simplify the way we transaction. Blockchain permits users to manipulate the ledger in a secure way without the help of a third party.
A bank’s ledge is connected to a centralised network. The blockchain is anonymous, protecting the identities of the users. This is the way maked blockchain more security to carry out transactions.The algorithm used in blockchain reduces the dependence on people to verify the transactions.Furthermore, it is the techonology used for recording various transactions has the potential to disrupt the financial system.
According to Williams (2017), Bauerle (n.d), Kleinman (2018) and Investopia (n.d), Blockchain is a public electronic ledger, it is quite similar to a relational database. Each digital record or transaction in the thread is called a block, and it allows both a free or regulated set of users to take part in the electronic ledger. Each block is connected to an unique participant.
How does blockchain works?
To begin, this is the simplest explanation. In the language of cryptocurrency, a block is a record of new transactions (which may mean cryptocurrency, or medical data, or even vote records). Once each block is completed it is added to the string, creating a series of blocks, it is called blockchain. Because encryption is encrypted, processing any transaction means solving complex math problems (and these problems become more difficult over time as the blockchain grows). Those who solve these equations are rewarded cryptocurrency in a process called “mining.” If you own any cryptocurrency, what you really get is the private key (basically just a long password) to its address on the blockchain. With this key you can withdraw money to spend, but if you lose the key there is no way to get back your money. Each account also has a public key, allowing others to deposit cryptocurrency into your account.
Information about blockchain is also public. It is decentralized, which means it does not rely on a computer or server to function. So any transaction is immediately visible to everyone. That is bring us to our first metaphor: the public ledger
According to Rosic (2016) and Drinkwater(2018), Blockchain is the idea of decentralization technology, it’s mean anything that happens on it is a function of the network as a whole. Blockchain are using cryptography, transactions are recorded chronologically and publicly, each one time-stamped and linked to the previous one. By creating a new way to verify transactions aspects of traditions commerce might become unnecessary. For example, it coud make types of record keeping like a land registry, full public. It’s already a reality. Furthermore, blockchain technology have use by global network for manage the database like as records Bitcoin transactions. Decentralization means the network operates on a user to user or peer to peer basis. It isn’t belong the third party like as any central authority.
Who will use the blockchain? According to Rosic (2016), finance offers the strongest use cases for the technology at currently. Therefore, there is a high demand for blockchain developers. The blockchain potential cuts out the middleman for these types of transactions.
With the video below will describes more details how does blockchain work?
How is the blockchain difference to a bank?
According to Skella (2017), any transaction of blockchain doesn’t need to be any middleman of any kind, it’s mean you haven’t to place your trust in any financial institution. For example, if A wanted to refund B money, this would be a new line item sending the money back – not the crossing out of the original transaction. According to Marvin (2017), the Web 1.0 was a read-only Internet of static web pages. Web 2.0, here are we now, added dynamic user-generated content and the rise of social media. Web 3.0 has many definitons. But one of the most popular is that of connective intelligence; the next generation of applications,data, concepts and people are connected by an unmediated fabric where you do not need a trust broker like a bank or tech company in the middle to ensure privacy and security. In blockchain, we finally have the technology to power Web 3.0. According to Rosic (2016), the blockchain is a new web 3.0 gives internet users the ability to create value and authenticates digital information with:
- Smart contracts
- The sharing economy
- Crowd funding
- Supply chain auditing
- File storage
- Prediction markets
- Protections of intellectual property
- Internet of thing (IoT)
- Identity management
- AML and KYC
- Anti-money laudering and know your customer practices have a strong potential for being adapted to the blockchain
- Stock trading
- Land title registration
- If you would like to know More information Web 3.0.
Marvin (2017) mentioned that Microsoft and IBM are using their cloud infrastructure to build custom blockchains for customers and experiment with their own use cases, network, etc.
According to Fraedom (n.d.), using Blockchain technology for bank transactions like as bitcoin transaction will made for banks become secure and made more difficult for hackers attacks to get data. They recommended, blockchain technology can use for establish secure network for any of asset, no just bitcoin.
According to Rosic (2016), the internet has security problems with everyone when they use “username/password”, it’s mean the network can exploit by hackers. But Blockchain security methods use encryption technology. In another words, blockchain security are called public and private “key”. A public key: along, randomly-generated string of numbers is a user’s address on the blockchain. For example, Bitcoin sent across the network gets recorded as belonging to that address. The private key: like a password that gives its owner access to their Bitcoin or other digital assets. Store your data on the blockchain and it is incorruptible, it is really reliable.
How does blockchain apply to cyber security?
According to Drinkwater (2018), Blockchain has the potential to improve everything from improving data integrity and digital identities to enabling safer IoT devices to prevent DDoS attacks. Indeed, blockchain might play across the ‘CIA triad security’ of confidentiality, integrity and availability, offering improved resilience, encryption, auditing and accountability.Furthermore, Bharati (2017) mentioned that, using of blockchain applications is increasing guarantee cyber security and protect organization against cyber-attacks.
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