What exactly is a blockchain?

Blockchain is a distributed database system with different nodes, which is an open ledger system.

It is composed of a string of data blocks or packets generated in accordance with cryptography method, namely blocks. The data information of each block is automatically stamped with time to calculate a data encryption value, namely hash value. What the hell is blockchain? A cartoon lets you understand in seconds!

Each block contains a hash of the previous block, which is linked from the genesis block to the current region to form the blockchain.

Reading the above description, you may still be confused.

A graphic example

But the following example may help you to understand the concept of “blockchain” more clearly, and grasp the main point of “blockchain” should understand!

Before wechat, how did we organize dinner?

All of them call a guy called the monitor and tell the monitor that you’re going to the dinner, and the monitor records this information in a “ledger” called the “centralized ledger”.

There are a lot of problems with this, but before wechat, we did this most of the time.

But with wechat, we usually use ** “wechat solitoring” ** to call and record.

For example, if a person sends a post to invite everyone to attend the dinner, each person adds a serial number after the previous person’s speech and adds his own name, and finally can record all the sign-up and the number of people, as follows:

  • 1 piece of XX

  • 2 Chen XX

  • 3 wu XX

  • 4 liu XX

** “Solilong post” in wechat group corresponds to the concept of “chained data structure” ** in blockchain.

In wechat group, ** “rule: each post = previous post content + next number + own name” corresponds to the concept of “consensus mechanism, formed according to strict rules and public protocols” ** in blockchain.

In wechat group, “after the rules are set, everyone will register spontaneously”, which corresponds to the concept of “decentralization, no single user can control it” in blockchain **.

“Registration in wechat group” in wechat group corresponds to the concept of “peer-to-peer network” in blockchain **.

“As long as you are connected, you can know the latest progress” in wechat group, which corresponds to the concept of “game mechanism” ** in blockchain.

In wechat group, ** “in order to form N individual registration records, there must be at least N individuals to send N posts, and group friends have archived mobile phones”, which corresponds to the concept of “distributed, multi-point backup, high redundancy” in blockchain **.

Wechat group in the ** “every post we can see, whether the updated record is wrong, people repeat, everyone can check”, corresponding to the concept in the blockchain is “shared account book” **.

Most of the people in the wechat group are familiar with each other and each has its own name/code. In blockchain, it is ** “to ensure the trust of strangers through asymmetric encryption technology” **.

How can blockchain save the credit crunch?

In tribal times, a simple glance in a crowd might have led to a black eye, but in the Internet age, why would anyone trust and pay a clothing vendor thousands of miles away?

Because in the process of the transaction, we entrust our trust to the state agency or large enterprise, there is still no trust between us and the person who sells the clothes. However, due to the endorsement of the state or large enterprise, we are willing to let them witness, which is a common way to increase mutual trust.

Among the many ways to increase trust among people, one of the tools that could help save the crisis of trust is blockchain. Blockchain is the core technology in the bitcoin financial system. Its essence is a growing distributed settlement database, which can perfectly solve the crisis of trust in the information system.

It starts with the question: Why should you trust a stranger? Why should anyone believe you?

** Blockchain uses algorithmic proof mechanisms to guarantee this trust. ** With it, all nodes in the entire system can automatically and securely exchange data in a trusted environment. Compared with other tool technologies that take time and money, it can automatically match, enforce in real time, and cost very little.

Trust technology rather than people. ** Blockchain technology brings a kind of intelligent trust. For example, the Honduran government has established a new system of registration and transaction of real estate deeds using blockchain technology. This is because Honduras has been plagued by unrest and lazy government workers, resulting in incomplete registrations or missing records. Such disputes are common around the world. With the secure encryption of blockchain technology, people no longer have to worry about their property rights being tampered with because of government corruption.

** In the future, all digitized information can be added to the blockchain. ** As long as you can enter the chain, information property rights can be clear, you can set protection conditions, you can automatically initiate and enforce trading contracts, you do not need to worry about trust verification and trust enforcement, because blockchain helps you to achieve.

In 2015, ezubao, a PEER-to-peer company that shocked China by breaking all the rules at once, grew out of chaos but died of rampant expansion and eye-popping criminal tactics.

Before the investigation, Ezubao carried out a large number of advertisements in the prime time of major TV channels, which was equivalent to endorsements of high-risk Internet financial products with public credibility. Tragedy occurs when a group of investors with little investment knowledge meets a group of speculators with no fear.

In the real society, transactions between people, between people and companies, and between companies need to be supported by public trust. Public credibility means that in social life, public power shows a trust of fairness, justice, openness, humanity, democracy and responsibility when facing time difference, public communication and interest exchange. At present, public credibility is generally provided by the government, state organs or third-party organizations authorized by the government.

Blockchain technology can well meet the demand for public trust, and the public trust is abstracted out as an independent existence rather than controlled by the government or third party organizations, forming a “new pattern of public trust” in which the government, the public, blockchain and public trust supervise each other.

Trust is built on the blockchain, rather than being controlled by a single organization, so credibility can be cross-verified and monitored by multiple parties.

What are the application scenarios of blockchain in the future?

Blockchain has three basic phases:

**1. Blockchain 1.0 stage: * Electronic currencies, including Bitcoin, RIPPLE and so on. The e-money phase allows for the simplest decentralized transactions.

***2. Block chain 2.0 era, * is the era we are currently in. The most important stage of blockchain is smart contract, digital assets and various decentralized business applications, including authentication and payment.

**3. In the blockchain 3.0 stage, * is a completely decentralized social network that we hope to form in the future. If we can achieve this point, it means that we can form a social trust relationship at a very low cost, thus greatly reducing the operating cost of the whole society.

Once blockchain technology enters the public view, it will certainly bring a trend. Let’s take a look at the application scenarios of blockchain in the future…

1. Banking and Finance: “Blockchain technology will no longer be on the periphery of the financial sector, but will occupy a central position,” GianCarlo Bruno, director of financial services at the WeF, said in a statement on the report. The report estimates that about 80 per cent of banks worldwide will start distributed ledger projects in the next year.

Barclays bank and an Israeli startup have completed the world’s first trade transaction based on blockchain technology. With blockchain technology, transaction processing, which traditionally takes between seven and 10 days, has been slashed to less than four hours.

In the foreseeable future, the world’s major banks will issue cryptocurrencies based on blockchain, the equity market will strengthen equity management through blockchain, and the settlement of currencies, bonds and stocks will also be carried out through blockchain solutions.

2. Commercial Credits ** : * * integral is a businessman in order to attract users to the secondary consumption of marketing, the current integral system, each merchant are independent, the integral system between merchants and isolated, with integral of users, the merchants of Commodity Exchange no desire, user integral consumption concept is very difficult to form, integral is almost no value; For merchants, points cannot bring secondary consumption, and it takes time and effort to establish points issuing and exchange system, which costs a lot but fails to achieve marketing effect.

A company named Moling Technology is using its blockchain-based technology to provide unionPay with a points platform, which can realize “exchange and exchange”, helping users to freely redeem points for reasonable consumption, stimulating users’ desire to consume points, and exploring the hidden economic benefits behind points.

Voting systems ** : ** Many businesses are actively building blockchain voting systems. Nasdaq, the global stock exchange giant, announced in February that it is developing a shareholder electronic voting system based on blockchain technology.

Bob Greifeld, NASDAQ’s chief executive, announced that “we intend to put proxy voting on the blockchain, an immutable ledger system where people can vote with their mobile phones and be recorded on the blockchain forever.” Imagine if blockchain technology had been used in this year’s ELECTION. Americans might be less worried about election fraud and opt for a manual recount.

4. Energy system ** ** US Energy company LO3 Energy partnered with Bitcoin developer Consensus Systems, TransActiveGrid, a blockchain-based interactive power grid platform, has been established for a small number of households in Gowanus and Park Slope, Brooklyn, New York.

Every producer and consumer of green energy on the platform can trade green energy directly without relying on a third party. Trading, including carbon emissions, can also be done online around the world.

5, Taxi service ** : ** The emergence of Uber has changed the way we travel, but in many European countries, Uber is illegal, they believe that the emergence of Uber has broken the rules of the taxi market.

One startup is using blockchain to do a truly decentralized ride sharing by creating a coin that drivers can earn by donating their resources, just like mining. It’s actually these taxi drivers who own shares in the company. It rationally solves the problems faced by Uber in the European market.

With the increasing maturity of block chain technology, future network security, banking, payment transfer, election, stock trading, judicial notarization will use block chain technology.

Of course, the technological development of blockchain will not be achieved overnight. The real use of these application scenarios also needs the follow-up of other conditions, including laws, modes, operations, and education on usage habits.

As GINNY Rometty, PRESIDENT and CEO of IBM, said, blockchain technology is far more important than artificial intelligence and deep learning.

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