Let’s face it - most of you already have the faintest notion what a block chain is. You’re on Steemit afterall! However, if like me, you only got introduced to the concept a while ago, you may be wondering what the deal with this new technology is.
Before I got on Steem, I did my due diligence. Researched most facets of the technology as best as I could. So now, I’m gonna try to pass some of my knowledge to you, so you don’t have to do what I did!
I also did an article about Bitcoin yesterday, where I briefly talked about it, but very superficially. Lets try to dig a little bit deeper now, in 4 easy topics you can easily understand!
Lets start, shall we?
Blockchain came to be with the origins of Bitcoin
We’re gonna start with a bit of history (won’t take long, and you can skip to the good stuff if you want, I just thought this deserved a mention :) ).
I assume you know at least a bit of the history of BitCoin. I’ll talk about that in a later article, if you want. Here’s the summed up version.
Some guy named Satoshi Nakamoto, of whom we know more or less nothing (except that he may actually be many people) created this system to work with BitCoin (he also created that currency). He intended it to be a ledger, recording every transaction everyone ever made with Bitcoins, and doing in a safe way, that would be much better than any database used today.
…you may deduce from the fact that this technology is now being used for many other purposes just how effective it is. So lets get down to meat. What is a blockchain?
Blockchain is a new kind of database – a decentralized one – and it’s damn good
Before I explain to you what the blockchain does so well, I’m gonna tell you what every other database type does wrong.
Gonna do this in the most classical way possible - by telling you a story. With some creative liberties of course.
Suppose you’re doing a group work for a college class. You’ve divided tasks with your teammate – but he’s a bit of a slacker. Or you are. Nothing out of the ordinary. But let’s thicken the plot, shall we? Because your teacher is very creative, and he wants to make life very difficult for you.
Here’s one of the basic rules - there can only ever be one version of the work, at any time. Meaning you cant do the age old tactic of just doing two different docs, each of them with your parts of the work, and then join them at the end. Anyway, you want to pass, so you play along. Can’t be too hard, right? All you need to do is make your part of the work, then your teammate will work on that version to add his part. Easy.
…Except he’s a slacker. And you’re absent-minded (not insulting you, dear reader, just taking some creative liberties to prove a point).
You do your part, sketch out the basic structure of the work, and send it to him, so he can do the same. As you send the work to him though, you remember you made some pretty bad mistakes from memory – you need to fix them now. But your teammate now has the work. You need to let him do his part before you can change yours.
You wait a whole day for him to do some basic work, then get the paper back and furiously start making the changes. But now your teammate wants it back, remembering some mistakes he made, and has to sit on his thumbs until you do your part.
Inconvenient, right? Well, that’s basically how the current system works now. The blockchain was designed to fix these problems.
Taking the previous analogy, Blockchain technology allows you to send new versions of the work to your pal. You could continuously produce new versions of the work and keep sending them to him, and he could do the same. At the end, you’d have many different versions of the work, all labeled and leading up to a final full version of the work, which you could then send to the professor.
That is the essence of blockchain – a chain to which new blocks can be appended, and in which no block can be changed.
But reality can’t be as clean-cut as the metaphor. What practical advantages could this new data base offer?
Blockchain fixes a problem we’ve always had with databases – their security
In the previous analogy, you saw the problem with centralized systems – the fact that all data needs to be sent to a certain central entity in order to be updated.
That always poses a problem security-wise – if a hacker gains access to the central part of the base, he/she can run amok, deleting or forging information on the system. And you’ve seen it happen. Data leaks, bank account hacking, loss of user confidentiality… The problems of this century, that seem to be getting more rampant as hackers step up their game.
The blockchain changes this – hackers no longer have a single target they can focus on, and they cannot delete a block from the chain, nor figure out what’s in the blocks, since all of them are encrypted. They change the current landscape, from one where a central entity is in charge of security to one where all parts of the network are.
Essentially the blockchain never has just one person in charge of it, and anyone can make some changes to it.
And that’s not all.
It has a ton of possible uses
This technology is super versatile – it’s a miracle for any business that needs to handle huge volumes of data reliably. You might have guessed the major customers for this tech – big banks. And they are craving this kind of technology.
Blockchain can work as a middleman in everything from business deals, exchanges of data, and even legal agreements. The cherry on the cake is the ability to make smart contracts though.
These contracts, the killer part of this technology in the business world, are basically programming contracts to execute only when certain conditions are met. Like you only being able to buy drinks at a bar when you’re over 21 (or whatever your age limit is). This will automate the structure of deals immensely, saving time, resources and legal complications.
And it’s not just big banks that are looking to cash in on this technology – small businesses are going in on it too. The music sharing business, the legal marijuana business, and many other types are already integrating this technology into their networks. Experts predict that over the next couple of years, this technology will explode – starting right now, in 2017.
But as I always say, every rose has it’s thorn. Let’s try to see the ones in this rose, from a distance.
Bitcoin has it’s disadvantages – and a long way to go
This technology is far better than the ones already used in many aspects… but worse in others. One of the most unexpected weaknesses in this technology lies in the time it takes.
You’d expect this decentralized technology to be speedy, and it can be… but not all the time. Due to limitations of bitcoin technology (revolving around calculating hash values and such – I’ll cover it in another article), money transactions can take 20 minutes or longer to go through – maybe even an hour. For many businesses, this would be time-consuming, tedious, and inconvenient for the customer - though it is improving a bit.
Another seriously inconvenient downside to this technology lies in what should be one of its main catches – security. Despite the system itself being unhackable from a computational perspective, there are loopholes. You cant change what’s in a block once it’s created… but if you can get control over the tools that create new blocks, you can wreak havoc on the chain.
Another difficulty lies in the age of the technology. A gifted infant is still an infant. There are many legal steps to take before this technology can be adopted throughout the world. The government needs to create regulation that can control what this technology is used for, and how. There need to be open standards in this technology. And virtual currencies need to be better accepted, regulated and pushed to the front, since this technology was created for those purposes in the first place.
That about wraps this up!
I hope I’ve managed to point out the ABC of this new technology.
It poises itself to be one of those new sweeping technologies, that doesn’t target your life directly, but rather the underlying fabric of it. This can change how transactions, legal challenges, and data exchanges occur in the world, and that will affect you immensely. Whether in a positive or negative way is yet to be revealed, but allow me to play the optimist – I believe this can be a vast improvement of current systems.
Sound off in the comments below! Tell me what you think about the article, what future you see for this tech! I’d also love it if you told me what you think about the article, and I’m open to any criticisms or questions you’d like to put out!
Steem on guys!
VPN, virtual private network,, i got it, I got it... yeah, i'm getting my head around the blockchain slowly, sounds awesome, i'll just have to go on faith it's truly the holy grail, but the info makes sense.
Once you wrap your head around, there's no unwrapping it :)
whatever I can help with, be my guest :)
ty
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The main thing that I like about Block chain is that it fills the gap in our society. That gap is TRUST. It is a fundamental currency in commerce, we do business with who we trust, right. So I think the Block chain is going to change the way we trust in business and each other .
Exactly! Well spotted :D
It's how the internet was always supposed to be
Perhaps I'm just too demanding, but it seems this just skimmed the surface of explaining the blockchain. It is still all too vague for me. You have all those images of linked computers, but don't explain how the blocks are voted on before being accepted as permanent data. You speak of security but don't say how or why. I still have so many questions. Like how does one access the rights to set up a server? Is it the same as setting up a server for a typical website? How is data routed to the blockchain? A typical website has a domain name that is held in nameservers that direct traffic like a traffic cop and point to the server where that website is stored. How does that differ from the blockchain? Does one have to pay to connect to the network and use its bandwidth? Who collects that money?
You're right on the money, and I approve of your criticism!
Understand this - while I did indeed read the white paper and many other sources, there are still some problems.
Firstly, in what concerns me, I dont quite understand all of this. Most of this content was new to me, and there are still concepts sinking in. I refrain trying to give my spin on topics I'm not quite sure of, so as to not mislead any of my readers. I hope that doesn't come across as uninformed, more like cautious, and intellectually honest with myself.
Secondly, there are many technical details that frankly, kinda divert from the topic. The security part you mention for instance. The white paper covers that part extremely well, but most of the topics are honestly best suited to an article about cryptography, which, as I mentioned, I will take on more thoroughly in the future. Taking them on now would:
1 - Be a significant load for me (I'm on summer vacation right now before I start my thesis, I really should be resting.)
2 - Be boring, distracting, and more confusing for the reader, on what is already a complex subject.
I do speak of the hashing process however, and the untamperable nature of the blocks, which is where most of the security part lies.
Finally, most of your questions lie on a more practical side of the technology. How to set up a blockchain server (which does not quite work like that), how it integrates with the net (not quite the same subject matter), how to collect the money... All things for someone who would want to set up a blockchain technology, instead of just learning about it.
I applaud your criticism though. And you're absolutely right - this was very superficial. I usually like to do my content like that, both because I like to encourage people to check for themselves, and because it's easier to keep this content running smoothly. If I were to go deeper in all my articles, my rhythm would probably decrease, and I'd only do 2 articles a week. I feel like I'd let down my followers like that :(
Tell you what though - I usually like to take the weekends off, but because your criticism was so pertinent, if my agenda allows me, I'll revisit this issue during the weekend, or at a later date, and try to answer every question you made, ok? :)
My comments were not so much a criticism as they were me reaching out to find a simple answer to what seems like very complicated stuff. I tried reading other material and couldn't understand most of it. The terms used meant nothing to me and I had no idea what they were writing. When I opened your post I was hoping to get answers but instead got about as much as I had already figured out. I expect that anyone who would write about such a topic would know more than I do. If the language used is something you can understand then I would be grateful if you could interpret for me. No hurry. Whenever you have the time.
Thanks!
Excellent explanation! I can understand blockchain a little bit more thanks to this post. ;)
Well thanks! Glad I could be of assistance! :)
You have a good grasp of the blockchain. I like the article maybe just a bit long. Other than that, nice job.
I tried to trim where I could, but at a certain point I thought that if I trimmed more, it would lose something important :(
Thanks for the input though! Will keep it in mind next time!
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Future yes... but the past... So the black-suits must have had a blockchain storing every bit of info on FaceBook from the beginning .. once they sink their teeth into steemit >>> game over ...
Why did these so called Anarchist capitalist dudes choose Google to run the Steemit search engine ?
is there even such a thing as a good capitalist?
Will we discover that steemit is in fact a pyramid scheme to get people to fork over various forms of Fiat?
or an elaborate decoy to deter people from platforms that promise censorship-free Speech, and Anonymity
Thanks for the input man, but a lot of your questions center on Steemit, not the blockchain on a theoretical basis.
As such, I'm not the best person to answer them. But good questions, and I encourage you to develop them, and make posts about it!
Man this was a great read! I don't like giving the government complete say on the matter, although I understand there needs to be some level of compliance. I feel the separation of currency and government control is key to our freedom. So,I'm in as long as they don't start putting chips (the mark) in our children filled will super blockchain tech in the future. Wont be able to poop your pants without it being recorded on a blockchain.
"Hey Bob, we have 3.4 million poopie butts on earth."
Bob monotonously "Dispatch the cleaning drones."
Thanks man!
The good thing about this technology is that it relies on decentralization! Although there will definitely be regulations as to how this tech can be used, there will never be a central authority on the issue, due to the way that it's built!
Thanks this was so informative really helped me to get a good start on understanding this
Thank you! A good start was my intention with this! You'll notice I left out a lot of details, both because I honestly dont quite understand some parts, and because I want to encourage people to check it out for themselves!
Hope I helped out anyway :D
Ohh it did will continue to try and learn more but was a good starting point
nice post. i regret for my disbelief to the BTC in the past few years.
Me too man. Me too :(
The key is to get into the right mindset, so you can make better decisions in the future! The best way to do that is to inform yourself thoroughly, and I hope I got you off to a good start in this topic :D
I love how in detail you've explained it, thanks sirlord and can't wait for more blogs!
Thanks man! But I'd like to point out, I didn't go into full detail! I left a lot of things out, either because I dont understand them fully, and dont want to mislead you, or because I like to leave some things for my readers to check! And I advise you to do just that! See this as a starting point!
I try to post content like this regularly man, hope you like it :D
I love blockchain, probably because it was the first bitcoin wallet I ever used. I get to customize my fees and all......
Some ppl talk negative about it but yet I still find blockchain to be the boss of all
Thanks for this, I've tried to read loads about blockchain but this made it simple enough that I can actually begin grasping it.
You're welcome mate! Thank you for the input :)
great subject man !!
continue.. you have a good idea @sirlordboss..
and good luck for you in other posts...
Thanks man! I try to deliver good, simple content regularly! Your support meanns a lot!
Nice.Really Brilliant Post...Thanks!
Thanks man! I mean it more like a starting point on this subject, hope it did its' job! :D
good post .. a very interesting read .. :)
Thanks man! Means a lot :)
Great post, thanks!
You're welcome man! glad I could help!
I resteemed :)
Thanks a lot man :D
Great post men, keep the good work
Thanks man :D
Great post! Lots of info.
Thanks man! glad you liked it!
This was great! I just discovered steem yesterday, it appears I have a lot to learn. Thanks for the lesson.
Glad I could help you get your bearing somehow :)
Its amazing how something as small as making Bitcoin an open source project has rapidly spawned this entire microcosm of cryptocurrencies, assets, and platforms. The future is very bright for blockchain (and blockchain-less) technology :-D Glad to be on board with you guys!
Same with you :D
informative post.. thank you!
Here is one example of banks working with big companies on blockchain projects
I believe 2020 is the year to wait for
http://media.daimler.com/marsMediaSite/en/instance/ko/Daimler-and-LBBW-successfully-utilize-blockchain-technology-for-launch-of-corporate-Schuldschein.xhtml?oid=22744703
welllll
Can I translate this post and post on Spanish?..... This is a very good information. Thank you for this post.
I'd prefer you didnt. This took me a lot of work and I wouldn't like to see it plagiarized... by all means make a spanish article about this, but dont just rip this off pls :/
I still don't get it - I get it more than before but I think I might have to play with blocks to actually GET IT. What I like about it is that I can use it while I am trying to get it. I might eventually get it. and I might not.
You will! I believe in you :D
https://steemit.com/football/@funfails/bayern-munich-news-bayern-munich-signs-james-rodriguez
Bayern munich's latest signing will blow your mind take a look at it here.
upvote this and follow for more :)
Brilliant post - thanks!
Thank you man! There was no need for you to spend steem just to help my post, but thanks a lot :D
I try to deliver good content consistently, it's all in a days' work :)
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Nice of you!!!