Blockchain Architecture: Technical Brief

Just recently, on October 31, 2018, Bitcoin celebrated its first anniversary – the first cryptocurrency turned 10 years old. Now almost all modern people have heard about Bitcoin. But only few of them can clearly and concisely answer the question: what are cryptocurrencies, and moreover, what is blockchain? In this article we will try to describe in simple words, what blockchain is and how it works.

Content:
(please, click the topic to scroll down to it)

  1. The history of creation and a brief description of Blockchain
  2. Technical Brief
  3. Private and public blockchain
  4. Advantages and disadvantages of blockchain technology
  5. Conclusion

 

1.  The history of creation and a brief description of Blockchain

Blockchain technology is the basis of cryptocurrency, and since recently it is being applied in other areas of life. From its name it becomes clear that, in fact, it is a chain of interconnected blocks.

The most important feature of the Blockchain technology is decentralization. That means, that the network operability is provided not by a single center, but by all its participants at the same time. For ease of understanding, the principle of operation of the blockchain can be compared with Torrent, where the user and the server are the same. Files that are downloaded from the tracker, are not located on the central server – they are stored by other users. Operations in the blockchain occur exclusively between users, without any intermediaries as well.

The term “blockchain” was first used on October 31, 2008. On the same day, the mysterious creator of Bitcoin Satoshi Nakamoto published his legendary article “Bitcoin: a one-time electronic monetary system.” The Bitcoin network was launched in early January 2009. But the concept of the modern blockchain itself was announced in the 1990s. Satoshi Nakamoto has put a lot of effort into the systematization of cryptographic works, which has been published over the past 20-25 years.

2. Technical Brief

We will not go delve into of cryptography, use narrowly defined terms and draw complex graphs. Firstly, 99.99% of people simply will not understand this (including us), and secondly, in order to open this topic completely, not one article, but an entire book is needed. In this article we are talking only about the basics of the architecture of blockchain systems.

So, the blockchain ledger can be conditionally compared with a book. It contains blocks that can be called “pages” of this book. Each block has a name that contains information about the previous block and the key from the next one. This is called a “chain of blocks”. All information is contained in an encrypted HASH. The keys from blocks are found by miners who maintain network performance.

3. Private and public blockchain

We all are used to associate blockchain with finances only, and more specifically with cryptocurrencies. But it is worth noting, that this technology is much more versatile, it can be applied in other areas of life, such as:

  • logistics;
  • identification;
  • proof of intellectual property rights;
  • voting;
  • music;
  • charity;
  • property;
  • etc.

The Bitcoin or any other cryptocurrency network uses a public blockchain, the keys of which are publicly available. It is perfect for the concept of cryptocurrency, but it cannot be used to maintain the workflow of private companies. The private blockchain is perfect for this. Lately it causes increased interest in many companies. For example, it can be used for tracking of goods trade and shipping companies. Such a solution will significantly reduce costs, as well as eradicate all sorts of fraud.

4. Advantages and disadvantages of blockchain technology

First, let’s talk about the advantages:

  • Decentralization. Such network is almost impossible to be closed, because for this it is necessary to disconnect all its members from the network.
  • Safety and reliability. Technical features of the technology exclude falsification, data fraud, and hacker attacks.
  • Versatility. This technology is predicted a great future, because it can be used in various industries.

Unfortunately, the blockchain technology is not perfect and has several disadvantages:

  • Scaling issues.
  • Irreversibility of operations. After the operation was recorded in blockchain, it is impossible to cancel it, even if it was done by mistake.

5. Conclusion

Blockchain technology can cardinally change our lives. Only narrow specialists are able to understand all mechanisms of its work. Basic principles, which we discussed in this article, will be enough for the vast majority of people.

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WordPress Launches Beta Version of Publishing Blockchain Platform

WordPress is planning to develop and launch a special publishing resource that will work on the blockchain technology. It is already known that the developers will call the platform Newspack. It will be free to post materials. The creators of the platform are confident that the use of blockchain in this case will affect the development of journalism.

The development of modern blockchain blogs

Now the developers are preparing the beta version of the platform for launch, which is planned for the middle of this year. However, anyone can already put the resource to the test. The feature of Newspack is that it will have its own version of CMS, which will allow editing content directly on blockchain. This will not affect CMS negatively, but vice versa will expand possibilities for ordinary users.

Until launch of the platform, the project will be financed by Automattic, and after all the users will be charged $ 1-2 thousand per month. There will also be a free version available, which will have limited functionality. The end of the platform development including the integration of all additions is scheduled till January 2020.

According to the information posted on the WordPress blog, Google will finance the platform, investing more than $ 1.2 million in its development. Civil Media’s progress is supposed to be used in order to use various plugins for CMS blockchain version.

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WWF Will Handle the Supply Chain with the Help of Blockchain

The Australian division of World Wildlife Fund has decided to integrate the blockchain technology into its supply chains in order to track down and store data on various kinds of food.

WWF partnered up with the company BCG Digital Ventures to create a blockchain-based platform called OpenSC and bring the plan into reality.

According to the official announcement of WWF Australia:

OpenSC enables businesses to track their products – anything from food to tissue paper – by adding a unique blockchain code at the product’s point of origin, such as the moment a fish is caught at sea.”

Moreover, OpenSC will allow its users to scan a special QR-code on the food they want to buy in order to see the information on a specific product: from its properties to how it traveled in the supply chain.

This is not the first time an organization or company of a global scale is turning to the blockchain technology. We remind you:

Ford Will Fight Child Labor in Africa Using Blockchain

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BitPay Transactions Surpasses $1B in 2018, B2B Payments Records 225% Increase

BitPay is a US-based bitcoin payment provider which has recently announced its financial results of the past year. The company has processed over $1 billion in transactions alone. Moreover, its B2B payments record 225% increase in compare to 2017.

The main reason of such a lift-off is that Bitpay added a lot of new clients, like Dish Networks, HackerOne, and the State of Ohio, as well as many other law firms, data center providers, and IT vendors.

The CEO of BitPay, Stephen Pair, commented on this development:

“BitPay’s B2B business continues to grow rapidly as our solution is cheaper and quicker than a bank wire from most regions of the world. To process over a $1 Billion for the second year in a row despite Bitcoin’s large price drop shows that Bitcoin is being used to solve real pain points around the world.”

BitPay mostly supports Bitcoin transactions, however, it also supports payments with Bitcoin Cash, Gemini, and Paxos. During that year a lot of companies had to lay off their employees due to the market situation, yet, Bitpay conversely increased its manpower by 78 percent in the past year.

In addition, BitPay is attractive to the investors, in 2018, it raised $40 million in Series B funding round taking the total raised capital to $70 million.

We remind you

Two European Finance Regulators Urge the EU To Adopt Crypto and ICO Rules

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Is Bank of America Going to Cooperate with Ripple?

As we all know, the crypto market is still in a deep recession. The collapse of cryptocurrencies at the end of last year negatively influenced all coins, however, some of them suffer less than others.

One of such coins was Ripple. Not only did it manage to outrun Ethereum in the rating, its blockchain platform keeps being implemented widely by the world’s largest companies in various spheres.

We remind you:

Ripple: 13 Financial Institutions Have Joined RippleNet, Surpassing 200 Customers All Over The World

Recently, there appeared rumors on the Internet, saying that the second largest financial institution, Bank of America, might be considering forming a partnership with Ripple Labs and incorporating the blockchain technology into its system, according to Fintech News.

Currently, the bank is using SWIFT technology for international transactions, which proved to be quite inconvenient, slow and insecure.

It is still unclear whether Bank of America wants to fully apply Ripple technology or create a similar app, but its main intention is to let the customers make transaction between various banks in a safer and easier way.

Neither of the sides have officially commented on the matter so far.

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Ford Will Fight Child Labor in Africa Using Blockchain

According to the report made by Reuters, an American major car manufacturer Ford is partnering up with such giants as IBM, LG Chem and Huayou Cobalt to create a joint blockchain platform which will track down cobalt coming from Congo.

This project is aimed at helping children who are working at cobalt mines in Congo against their will and against any human rights.

The blockchain platform is going to analyze the supplies of cobalt coming from Congo to be later utilized to produce lithium-ion batteries (which can actually be found in Ford cars) and, if it is coming from mines where child labor is applied, make sure it never makes its way into the world market.

Moreover, the future plans in this direction involve using AI chemical analysis in order to identify cobalt from other metals in the supplies, since they often merge together naturally, making it impossible to distinguish between them.

This important step in fighting child labor in Africa has been in the making since the December of last year, however, the companies taking part in its implementation chose to keep it quiet until recently. The trials of the platform that will soon be conducted are going to track cobalt form Huayou mines to LG chemical plants and finally to Ford vehicles.

We remind you:

The UN Will Use Blockchain to Develop Healthcare in Africa

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A Video Gamer Received a 20-Bitcoin Donation on Twitch

A video game player under the nickname Sick Nerd received a donation from an anonym in the amount of 20 Bitcoins when playing the game RuneScape and streaming it on the platform Twitch.

Sick Nerd mentioned this on his Twitter:

At first, the streamer received only 4 BTC. He didn’t take it seriously right away, but kept receiving new donations in cryptocurrency. Overall, Sick Nerd became richer by over 20 BTC during his streaming session.

This is the largest crypto donation sent to a video game player ever, and, of course, the largest donation ever received by Sick Nerd (more than 70 thousand dollars).

Cryptocurrency keeps making its way into every sphere of human activity, and video games are no exception. We remind you:

Cryptocurrency Games: Bitcoin Game Review

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