Understand the principle and application of blockchain through bitcoin
Since bitcoin, the decentralization of blockchain technology and the fact that data cannot be tampered with are increasingly considered to subvert the transaction foundation of human beings for thousands of years. Although the current bitcoin's network computing power is suspected to be monopolized by a few people, blockchain technology has become a growing branch of fintech (Financial Technology) under the active embrace of new start-ups and banks in various countries As a decentralized database in a new era, the application imagination space and development potential of blockchain are huge, which can be seen from the financial field to the Internet of things and cloud computing._DJMINER
Speaking of blockchain, we need to start with bitcoin. Bitcoin is a new type of digital asset and transaction mode, which was invented by Satoshi Nakamoto. He put forward this concept in the cryptography discussion group on November 1, 2011. The most important thing is to successfully use the concept of "blockchain" to open the account book, making "repeated deduction" the largest virtual currency Users are willing to contribute CPU computing power, run a special software to be a "digger", which will form a network to maintain the regional chain together, and in this process, new currency will be generated. Transactions are also spreading on this network. Computers running this software are scrambling to solve the irreversible password problems, including several transaction data. The first "miner" to solve the problem will receive a 50 bitcoin reward, and the relevant trading area will join the chain. As the number of miners increases, so does the difficulty of each puzzle, which keeps the bitcoin productivity of each trading area at about 10 minutes. In addition, for every 210000 regions, rewards are halved, from 50 bitcoin to 25, and then from 25 to 12.5, all the way down. In this way, by 2140, bitcoin will reach the predetermined ceiling of 21 million, and a decentralized and reliable virtual payment system for tracking transactions will be successfully established. Bitcoin's price reached $979.45 in November 2013 and is currently around $9000._DJMINER
Similarly, the blockchain of bitcoin can be regarded as a public ledger, which has the following characteristics:
★ each node on the network has a complete ledger backup
★ there are all transaction records of bitcoin from its birth to now in the account book
★ the ledger itself records transactions in blocks, each block contains a part of transactions, and each block remembers the ID of the previous block, forming a chained data structure, so it is called blockchain
★ when a node wants to initiate a transaction, it will broadcast the transaction to other nodes first. At this time, all nodes can decide who can verify the transaction through consensus algorithm, that is, "solve the problem". Then, a miner will help your transaction message package into a new block and send it to the blockchain. At this time, the transaction is completed (blockchain.info can see the instant message of the block)
★ when one of the nodes solves the problem first, the node will write the verified transaction into the blockchain and broadcast to other nodes. Once the data is written into the blockchain, it can no longer be tampered with
★ each bitcoin account has a public key and a private key. When initiating a transaction, only the private key is needed to sign, and then the miner checks the signature with the public key
★ if you don't have enough bitcoin balance in your account, you only need to go back to the transaction record of the whole account book to detect the difference and cancel the transaction
Of course, the consensus algorithm core mechanism on the blockchain still has security concerns, such as 51% attacks. If someone can master 51% of the computing power of the whole network, it will have the opportunity to rewrite all the blockchain and cause the system to crash. The larger the system, the more difficult the crisis will occur. After all, this means that hackers will attack the data center of the big giants before the event._DJMINER
Blockchain technology integrates mathematics, encryption technology and economic model. The purpose is to maintain a set of network relationship database composed of multiple participants without the assistance of a third-party organization for verification and reconciliation. In short, it is a secure distributed ledger.
Public blockchain: all people can access all data, all people can send out transactions, and participants in the consensus process can use cryptography and other ways to maintain the security of the database, such as bitcoin.
Federated blockchain: the participating nodes are selected in advance, and the blocks will not be expanded at will. The network between nodes will even be defined in advance to ensure security. The consensus algorithm on the network can be defined by itself, such as R3 joined by more than 40 banks in the world.
Private blockchain: only a single user participates in the node, and all data use has strict permission control, such as LINQ used by Nasdaq.
Bitcoin began to be encircled by central banks in 2013. The biggest reason is its anonymity. You can get all blocks, but you can't use blocks to track actual trading users. To make the government and the public slowly accept the need for a stronger security of the recognition system to avoid money laundering doubts. After building a blockchain of sufficient scale, in addition to smart contracts, the blockchain can also be used for mass fundraising, cross-border exchange and valuable asset issuance.
At present, more and more software companies have joined the battle. IBM announced the open ledger project based on Linux foundation, which will provide libraries to other organizations to build their own blockchain. Openchain, a new start-up company, provides an open-source distributed ledger technology. The ledger manager can quickly define the authentication rules of the ledger, and then users can transfer their digital assets, just like bitcoin._DJMINER
In addition to the innovations in finance, the two characteristics of the block chain are Decentralized and Indelible ledger, which can be combined with the most popular Internet of X (Internet +) concept. M2M (machine to machine) in the inner circle is the lowest mechanism. It uses various communication methods to share "data" in series with machines, and IOT (Internet of things) on it starts to build a network of connected machines and use valuable data to build "services". Next, it develops to the concept of Internet of everything proposed by Cisco, which contains elements including Data, things, processes and even people are different from IOT. The concept of Internet of things focuses on building "human connection", and its methods include various IOT, wearable devices, smart homes, social networks (Facebook, instagram), etc. at that time, individuals will use physical connection (wireless transmission) and spiritual chain Then (interpersonal relationship, network community) becomes a network node that cannot be external to the Internet of things.
When it comes to the Internet of value (IOV), which has recently made a great impact on the world, it can conceptually cover the above-mentioned things, because when data, computing power and even money can be freely transmitted through the network, people will suffer from the impact from barter to various metal based pricing methods for thousands of years, but I really don't think it will happen in the foreseeable future, Because this has fundamentally impacted the human political and financial system, the vested interests will try their best to prevent it.
Blockchain is a shortcut to IOV, which allows users to complete the transfer of ownership between their fingers without the risk of default or manipulation by intermediary third parties. It can automate transactions and create a perfect and reliable digital record. Blockchain technology does not need trusted intermediaries (such as banks, governments, etc.), which can provide higher integrity and stronger audit ability , and better regulation. Therefore, blockchain technology can not only be used in various financial transactions, but also in various public and private fields such as business contracts, taxes, voting, medical records, digital passports, digital currency issuance, and almost all levels of daily life.
The popular sharing economy, such as airbnb and Uber, relies on the reputation and quality of service platform of service providers. Airbnb also solicits block chain experts to fill in the loopholes of trust mechanism, making the evaluation between landlords and tenants more objective and reliable. Its block expansion mechanism can even collide with deep mining FLOWER._DJMINER
What is bitcoin?
Speaking of blockchain, we need to start with bitcoin. Bitcoin is a new type of digital asset and transaction mode, which was invented by Satoshi Nakamoto. He put forward this concept in the cryptography discussion group on November 1, 2011. The most important thing is to successfully use the concept of "blockchain" to open the account book, making "repeated deduction" the largest virtual currency Users are willing to contribute CPU computing power, run a special software to be a "digger", which will form a network to maintain the regional chain together, and in this process, new currency will be generated. Transactions are also spreading on this network. Computers running this software are scrambling to solve the irreversible password problems, including several transaction data. The first "miner" to solve the problem will receive a 50 bitcoin reward, and the relevant trading area will join the chain. As the number of miners increases, so does the difficulty of each puzzle, which keeps the bitcoin productivity of each trading area at about 10 minutes. In addition, for every 210000 regions, rewards are halved, from 50 bitcoin to 25, and then from 25 to 12.5, all the way down. In this way, by 2140, bitcoin will reach the predetermined ceiling of 21 million, and a decentralized and reliable virtual payment system for tracking transactions will be successfully established. Bitcoin's price reached $979.45 in November 2013 and is currently around $9000._DJMINER
What is the principle of blockchain?
Similarly, the blockchain of bitcoin can be regarded as a public ledger, which has the following characteristics:
★ each node on the network has a complete ledger backup
★ there are all transaction records of bitcoin from its birth to now in the account book
★ the ledger itself records transactions in blocks, each block contains a part of transactions, and each block remembers the ID of the previous block, forming a chained data structure, so it is called blockchain
★ when a node wants to initiate a transaction, it will broadcast the transaction to other nodes first. At this time, all nodes can decide who can verify the transaction through consensus algorithm, that is, "solve the problem". Then, a miner will help your transaction message package into a new block and send it to the blockchain. At this time, the transaction is completed (blockchain.info can see the instant message of the block)
★ when one of the nodes solves the problem first, the node will write the verified transaction into the blockchain and broadcast to other nodes. Once the data is written into the blockchain, it can no longer be tampered with
★ each bitcoin account has a public key and a private key. When initiating a transaction, only the private key is needed to sign, and then the miner checks the signature with the public key
★ if you don't have enough bitcoin balance in your account, you only need to go back to the transaction record of the whole account book to detect the difference and cancel the transaction
Of course, the consensus algorithm core mechanism on the blockchain still has security concerns, such as 51% attacks. If someone can master 51% of the computing power of the whole network, it will have the opportunity to rewrite all the blockchain and cause the system to crash. The larger the system, the more difficult the crisis will occur. After all, this means that hackers will attack the data center of the big giants before the event._DJMINER
What financial applications does blockchain include?
Blockchain technology integrates mathematics, encryption technology and economic model. The purpose is to maintain a set of network relationship database composed of multiple participants without the assistance of a third-party organization for verification and reconciliation. In short, it is a secure distributed ledger.
At present, the application of blockchain can be divided into three categories in terms of scale:
Public blockchain: all people can access all data, all people can send out transactions, and participants in the consensus process can use cryptography and other ways to maintain the security of the database, such as bitcoin.
Federated blockchain: the participating nodes are selected in advance, and the blocks will not be expanded at will. The network between nodes will even be defined in advance to ensure security. The consensus algorithm on the network can be defined by itself, such as R3 joined by more than 40 banks in the world.
Private blockchain: only a single user participates in the node, and all data use has strict permission control, such as LINQ used by Nasdaq.
Bitcoin began to be encircled by central banks in 2013. The biggest reason is its anonymity. You can get all blocks, but you can't use blocks to track actual trading users. To make the government and the public slowly accept the need for a stronger security of the recognition system to avoid money laundering doubts. After building a blockchain of sufficient scale, in addition to smart contracts, the blockchain can also be used for mass fundraising, cross-border exchange and valuable asset issuance.
At present, more and more software companies have joined the battle. IBM announced the open ledger project based on Linux foundation, which will provide libraries to other organizations to build their own blockchain. Openchain, a new start-up company, provides an open-source distributed ledger technology. The ledger manager can quickly define the authentication rules of the ledger, and then users can transfer their digital assets, just like bitcoin._DJMINER
What are the possible applications of blockchain in other fields?
In addition to the innovations in finance, the two characteristics of the block chain are Decentralized and Indelible ledger, which can be combined with the most popular Internet of X (Internet +) concept. M2M (machine to machine) in the inner circle is the lowest mechanism. It uses various communication methods to share "data" in series with machines, and IOT (Internet of things) on it starts to build a network of connected machines and use valuable data to build "services". Next, it develops to the concept of Internet of everything proposed by Cisco, which contains elements including Data, things, processes and even people are different from IOT. The concept of Internet of things focuses on building "human connection", and its methods include various IOT, wearable devices, smart homes, social networks (Facebook, instagram), etc. at that time, individuals will use physical connection (wireless transmission) and spiritual chain Then (interpersonal relationship, network community) becomes a network node that cannot be external to the Internet of things.
When it comes to the Internet of value (IOV), which has recently made a great impact on the world, it can conceptually cover the above-mentioned things, because when data, computing power and even money can be freely transmitted through the network, people will suffer from the impact from barter to various metal based pricing methods for thousands of years, but I really don't think it will happen in the foreseeable future, Because this has fundamentally impacted the human political and financial system, the vested interests will try their best to prevent it.
Blockchain is a shortcut to IOV, which allows users to complete the transfer of ownership between their fingers without the risk of default or manipulation by intermediary third parties. It can automate transactions and create a perfect and reliable digital record. Blockchain technology does not need trusted intermediaries (such as banks, governments, etc.), which can provide higher integrity and stronger audit ability , and better regulation. Therefore, blockchain technology can not only be used in various financial transactions, but also in various public and private fields such as business contracts, taxes, voting, medical records, digital passports, digital currency issuance, and almost all levels of daily life.
The popular sharing economy, such as airbnb and Uber, relies on the reputation and quality of service platform of service providers. Airbnb also solicits block chain experts to fill in the loopholes of trust mechanism, making the evaluation between landlords and tenants more objective and reliable. Its block expansion mechanism can even collide with deep mining FLOWER._DJMINER
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