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At its heart block chain is simply a public ledger that allows even distribution on a peer to peer network. Having that said, before we delve much further in the book I wanted to take the time to explore just how that network functions. In the following sections of this chapter we will take a closer look at some of the more essential aspects of block chain both as a system and as a commodity. Because it is all part and parcel to understanding the essentials of block chain.
The Beginnings of the Chain
Being able to trace back to the beginning of the block chain is of great importance when it comes to understanding the essentials of the block chain architecture. First of all, the reason behind the creation of block chain in the first place was because it served to provide a cheap and reliable means to secure financial transactions being made.
Therefore the efficiency of the block chain system has its roots in the previous standard systems and all of the flaws and shortsightedness of the current systems in use. Inflation for example is a big flaw of the paper based money of the old financial banking system. Obviously if you can print out something infinitum as that commodity accumulates it will inevitably inflate and lose its value, any yet governments all over the world are guilty of this very practice.
And this is painfully the case right now with paper bills in much of the world. For thousands of years such things have been the mode through which we have ascribed value but that old system is teetering on collapse. And as we progress through the years, we find such things as the old standard of paper money, being only as good as we can carry them, meaning that usually they are relegated to just minor dealings near our home address.
With fluctuating rates of inflation, paper money may not be good for long term travel and relocation. Due to cash only locales, transaction discrepancies, fraud, and outright mismanagement, these modes of transaction are quickly becoming obsolete. This is only exacerbated by the rapid increase in transactional volumes due to the rise of consumers who shop online.
We can buy just about anything with just a few clicks of a mouse and even more recently; a tap on our phone. And now that virtually everyone has a supercomputer in the form of a smart phone in their pocket, the next step in this evolution is the coming of the “IOT” (Internet of Things) and the need for rapid fire transactions that can be securely verified in quick succession.
This is laying down the groundwork for the efficient and unshakable block chain. Because—as we will discuss later in this book—it is the architecture of the block chain that will allow for all of the items on the internet of things to communicate with each other without interruption. When your coffee pot needs to request something from your home’s hot water heater for example, it will do it through the unbreakable blocks of the block chain.
For many of us in this world of uncertainty there seems to be very few things that we can trust, but as the proponents of the block chain contend, its cryptography is built upon trust itself. If they prove to be correct in their assertions it could very well be the beginnings (as Humphrey Bogart might say) of a beautiful relationship on the bock chain.
The First Application of the Technology; Bitcoin
Bitcoin in many instances has been greatly misunderstood. It was long believed to be some netherworld system of bartering developed somewhere on the Silk Road for nefarious cyber criminals. But Bitcoin is nothing of the sort. Bitcoin is the product of a whitepaper introduced in 2008 with the premise of creating a peer to peer decentralized system of monetary transaction.
It was never meant to be an enabler of cyber crooks; that was just a side effect of the type of people who were willing to be early adopters of the technology. And furthermore Bitcoin was merely the vehicle, the developers had chosen, but more importantly, the block chain technology was the system that was employed to get us there. No one can print out a block chain based digital currency such as Bitcoin and cause deflation.
Even if Bitcoin did have hard backed currency (which it currently does not) the decentralized control in the peer to peer block chain system simply does not allow for such things to occur. There is no middle man calling the shots in the block chain system there is no one holding a monopoly over any section of the platform. A product of the Block Chain such as Bitcoin isn’t printed out; it is mined.
As you can see, Bitcoin may have paved the way as the first application of the technology, but the game changer itself is the block chain system that made it possible in the first place. As it turns out the platform through which the first bitcoins were conveyed is rock solid. Bitcoin gave us the blueprint as to how block chain could be implemented.
Now that the block chain has been seen in action through the success of Bitcoin we can make use of the block chain technology in many other areas of our lives. In just about any application that requires trusted transactions block chain continues to prove its usefulness. There are many promising avenues ahead, but much trial and error must run the gamut.
We can only hope then that after the first application of Bitcoin has fully run its course, future applications of the block chain technology will likewise prove to be effective. So far the results are good, but we are still waiting for some pending returns, widespread use, and pending investment. So keep your eyes peeled and your fingers crossed folks, because for right now we are just going to have to wait this one out!
The Block Chain Revolution
Typical methodology in creating exchanges through block chain rests upon a network of public ledgers. The reason why the standard bearer alternative is so darn costly is because it relies upon a middle man in order to do business. Whether that middle man is a bank or a car salesman, it simply boils down to someone who stands between you, your money, and what you want to do with your money.
The block chain cuts out this middleman entirely, eliminating transaction fees, squelching verification delays, and eliminating the chance for simple human error. The revolution being generated by the nature of block chain and the fact that it is shared universally by all parties that participate in the system; and in essence, a true “ecosystem” where everyone in the system works to support each other.
The block chain network works through creating a consensus, using provenance and immutability. And with the unique nature of the no return policy that the block chain promotes double spending is a thing of the past, and since each transaction works by bonding to the next in a transparent and easily understandable manner.
The whole idea is to encase the block chain inside of an easily read, yet secure platform. Think of it as mathematical computations encased in giant glass cubes that can be seen through by anyone who so takes the liking to do so. In this fashion it is easy to see that the block chain is a revolution in the making. So join the movement, and don’t get left behind!
The Trust of the Block Chain
The structure of the block chain works to instill trust in all those who use it. It is for this reason that a crypto currency such as Bitcoin that uses the network uses the motto, “In the Block Chain we Trust”. It isn’t meant to be irreligious or a swipe at the traditional inscription on cash of “In God we Trust”, it is just meant to indicate how big of a role that the block chain plays in this revolution.
Block chain works to instill trust between users across a wide platform. Since every transaction is linked in a chain to the last one that was made, this built in, and interconnected accountability helps to safeguard against fraud and corruption. In essence the whole block chain ecosystem works by having its members proactively police each other.
This greatly streamlines the path for regulation apparatus by allowing quick and easy scrutiny of the data within the block chain for anyone who so desires it. Making sure that everything is compliant is crucial, that is why consensus reached through mathematic proof of work is so important when it comes to the block chain.
The trust of the block chain network as impersonal as it is; actually amounts to the same kind of trust that you give to your friends and family. The network knows what is legitimate and what is not, on a personal basis. It doesn’t have to look much farther than its own personal relationships on the chain to figure out who is who on the block chain block.
With the block chain there is no way to hide; you know exactly where every single user is on the network and what kind of transaction they are making. There is no way for anyone to create a fraudulent transaction, and no way for anyone to shortchange anyone else on the network. Everything is open, and easily available for every member to figure it all out on their own; at their own pace.
There is an old expression that states, “Respect is given, but trust is earned”. But the block chain for many end users and developers seemed to earn much respect and trust simultaneously all at the same time. The block chain itself is built on trust, and hopefully it will stay that way for a long time to come; because the trust of the block chain is truly a force to be reckoned with.
The Complete Guide to Understanding Block Chain Technology By Matthew Scott
The Beginnings of the Chain
Being able to trace back to the beginning of the block chain is of great importance when it comes to understanding the essentials of the block chain architecture. First of all, the reason behind the creation of block chain in the first place was because it served to provide a cheap and reliable means to secure financial transactions being made.
Therefore the efficiency of the block chain system has its roots in the previous standard systems and all of the flaws and shortsightedness of the current systems in use. Inflation for example is a big flaw of the paper based money of the old financial banking system. Obviously if you can print out something infinitum as that commodity accumulates it will inevitably inflate and lose its value, any yet governments all over the world are guilty of this very practice.
And this is painfully the case right now with paper bills in much of the world. For thousands of years such things have been the mode through which we have ascribed value but that old system is teetering on collapse. And as we progress through the years, we find such things as the old standard of paper money, being only as good as we can carry them, meaning that usually they are relegated to just minor dealings near our home address.
With fluctuating rates of inflation, paper money may not be good for long term travel and relocation. Due to cash only locales, transaction discrepancies, fraud, and outright mismanagement, these modes of transaction are quickly becoming obsolete. This is only exacerbated by the rapid increase in transactional volumes due to the rise of consumers who shop online.
We can buy just about anything with just a few clicks of a mouse and even more recently; a tap on our phone. And now that virtually everyone has a supercomputer in the form of a smart phone in their pocket, the next step in this evolution is the coming of the “IOT” (Internet of Things) and the need for rapid fire transactions that can be securely verified in quick succession.
This is laying down the groundwork for the efficient and unshakable block chain. Because—as we will discuss later in this book—it is the architecture of the block chain that will allow for all of the items on the internet of things to communicate with each other without interruption. When your coffee pot needs to request something from your home’s hot water heater for example, it will do it through the unbreakable blocks of the block chain.
For many of us in this world of uncertainty there seems to be very few things that we can trust, but as the proponents of the block chain contend, its cryptography is built upon trust itself. If they prove to be correct in their assertions it could very well be the beginnings (as Humphrey Bogart might say) of a beautiful relationship on the bock chain.
The First Application of the Technology; Bitcoin
Bitcoin in many instances has been greatly misunderstood. It was long believed to be some netherworld system of bartering developed somewhere on the Silk Road for nefarious cyber criminals. But Bitcoin is nothing of the sort. Bitcoin is the product of a whitepaper introduced in 2008 with the premise of creating a peer to peer decentralized system of monetary transaction.
It was never meant to be an enabler of cyber crooks; that was just a side effect of the type of people who were willing to be early adopters of the technology. And furthermore Bitcoin was merely the vehicle, the developers had chosen, but more importantly, the block chain technology was the system that was employed to get us there. No one can print out a block chain based digital currency such as Bitcoin and cause deflation.
Even if Bitcoin did have hard backed currency (which it currently does not) the decentralized control in the peer to peer block chain system simply does not allow for such things to occur. There is no middle man calling the shots in the block chain system there is no one holding a monopoly over any section of the platform. A product of the Block Chain such as Bitcoin isn’t printed out; it is mined.
As you can see, Bitcoin may have paved the way as the first application of the technology, but the game changer itself is the block chain system that made it possible in the first place. As it turns out the platform through which the first bitcoins were conveyed is rock solid. Bitcoin gave us the blueprint as to how block chain could be implemented.
Now that the block chain has been seen in action through the success of Bitcoin we can make use of the block chain technology in many other areas of our lives. In just about any application that requires trusted transactions block chain continues to prove its usefulness. There are many promising avenues ahead, but much trial and error must run the gamut.
We can only hope then that after the first application of Bitcoin has fully run its course, future applications of the block chain technology will likewise prove to be effective. So far the results are good, but we are still waiting for some pending returns, widespread use, and pending investment. So keep your eyes peeled and your fingers crossed folks, because for right now we are just going to have to wait this one out!
The Block Chain Revolution
Typical methodology in creating exchanges through block chain rests upon a network of public ledgers. The reason why the standard bearer alternative is so darn costly is because it relies upon a middle man in order to do business. Whether that middle man is a bank or a car salesman, it simply boils down to someone who stands between you, your money, and what you want to do with your money.
The block chain cuts out this middleman entirely, eliminating transaction fees, squelching verification delays, and eliminating the chance for simple human error. The revolution being generated by the nature of block chain and the fact that it is shared universally by all parties that participate in the system; and in essence, a true “ecosystem” where everyone in the system works to support each other.
The block chain network works through creating a consensus, using provenance and immutability. And with the unique nature of the no return policy that the block chain promotes double spending is a thing of the past, and since each transaction works by bonding to the next in a transparent and easily understandable manner.
The whole idea is to encase the block chain inside of an easily read, yet secure platform. Think of it as mathematical computations encased in giant glass cubes that can be seen through by anyone who so takes the liking to do so. In this fashion it is easy to see that the block chain is a revolution in the making. So join the movement, and don’t get left behind!
The Trust of the Block Chain
The structure of the block chain works to instill trust in all those who use it. It is for this reason that a crypto currency such as Bitcoin that uses the network uses the motto, “In the Block Chain we Trust”. It isn’t meant to be irreligious or a swipe at the traditional inscription on cash of “In God we Trust”, it is just meant to indicate how big of a role that the block chain plays in this revolution.
Block chain works to instill trust between users across a wide platform. Since every transaction is linked in a chain to the last one that was made, this built in, and interconnected accountability helps to safeguard against fraud and corruption. In essence the whole block chain ecosystem works by having its members proactively police each other.
This greatly streamlines the path for regulation apparatus by allowing quick and easy scrutiny of the data within the block chain for anyone who so desires it. Making sure that everything is compliant is crucial, that is why consensus reached through mathematic proof of work is so important when it comes to the block chain.
The trust of the block chain network as impersonal as it is; actually amounts to the same kind of trust that you give to your friends and family. The network knows what is legitimate and what is not, on a personal basis. It doesn’t have to look much farther than its own personal relationships on the chain to figure out who is who on the block chain block.
With the block chain there is no way to hide; you know exactly where every single user is on the network and what kind of transaction they are making. There is no way for anyone to create a fraudulent transaction, and no way for anyone to shortchange anyone else on the network. Everything is open, and easily available for every member to figure it all out on their own; at their own pace.
There is an old expression that states, “Respect is given, but trust is earned”. But the block chain for many end users and developers seemed to earn much respect and trust simultaneously all at the same time. The block chain itself is built on trust, and hopefully it will stay that way for a long time to come; because the trust of the block chain is truly a force to be reckoned with.
The Complete Guide to Understanding Block Chain Technology By Matthew Scott
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