A blockchain is a digital database list of records that are secured with advanced cryptography. It is an electronic ledger which keeps an unchangeable record of data operations. These operations are grouped in blocks. blockchain allows you to connect directly with the dataset stored in the network.
Blockchain transactions are based on asymmetric cryptography and two keys (private and public).
In practice, it works as follows:
1- you create transactions using your private key.
2- a transaction is being sent to a network node and it awaits to be taken into the block. Miner calculates the next block of the blockchain.
3- the block is broadcasted to the network.
4- the network verifies the block based on a consensus algorithm that decides which copy of data on the network is valid and which is invalid by keeping track of the entire blockchain.
5- after verified, the block is added to a chain which represents an indelible and transparent record of transactions, then the transaction is completed.
The Most Important Blockchain Applications
1- Smart Contracts
Smart contracts are computer protocols intended to digitally facilitate, verify, or enforce the negotiation or performance of a contract. according to “Chris DeRose” on American Banker: “smart contracts is a self-automated computer program, that can carry out the terms of any contract, it is a financial security held in escrow by a network that is transferred to recipients”.
They help businesses to be able to avoid regulations and low the costs for a subset of our most common financial transactions. anyway, these contracts will be unbreakable.
Native tokens is an example of a mass smart contract. they are used to encourage a disparate group of people, who do not know or trust each other to organize themselves around the purpose of a specific blockchain.
2- Cloud Storage
STORJ is a company that’s using the blockchain to provide users with affordable, fast, and secure cloud storage. “Shawn Wilkinson,” Storj founder said that, “Simply using excess hard drive space, users could store the traditional cloud 300 times over,” much like how you can rent out a room on Airbnb.
Wilkinson added, “Considering the world spends $22 billion + on cloud storage alone, this could open a revenue stream for average users, while significantly reducing the cost to store data for companies and personal users”.
3- Paying Employees
If your company regularly pays wages to international workers, then incorporating Bitcoin into the payroll process could be a major cost saver. there is paying remote employees and contractors. This form of payments is a very large part of my personal business and something many big companies and banks are betting on this year. payments made via Bitcoin can save both money and time for employers and employees alike.
Bitwage, the first Bitcoin-based payroll service, will circumvent the costly fees associated with transferring money internationally, as well as the time it takes for such funds to move from bank to bank. Jonathan Chester, Bitwage’s founder says that
“by using a public ledger of all transactions in chronological order, you can actually see exactly where the money is throughout the process”.
4- Electronic Voting
BitShares, a globally distributed database, declared that “Delegated Proof of Stake” (DPOS) is the fastest, most efficient, most decentralized, and most flexible consensus model available. BitShares goes on to state:
BitShares says: “DPOS leverages the power of stakeholder approval voting to resolve consensus issues in a fair and democratic way. All network parameters, from fee schedules to block intervals and transaction sizes, can be tuned via elected delegates. Deterministic selection of block producers allows transactions to be confirmed in an average of just 1 second. Perhaps most importantly, the consensus protocol is designed to protect all participants against unwanted regulatory interference”.
5- Supply-Chain Communications
Most of the things we buy aren’t made by a single entity, but by a chain of suppliers who sell their components to a company that assembles and markets the final product. The problem with this system is that if one of these components fails, the brand takes the brunt of the backlash.