What can blockchain be used for? What are the advantages of blockchain technology?

In a nutshell, Blockchain is the underlying technology of Bitcoin, like a database ledger, which records all transaction records, and is essentially a decentralized database. This technology has also gradually attracted the attention of the banking and financial industry due to its safety and convenience.

What can blockchain be used for? From the current point of view, the most obvious application of blockchain is Bitcoin. The earliest attention of the blockchain also benefited from Bitcoin.

First, currency applications, such as Bitcoin and Ethereum;

The second is the traditional financial field, devoted to cross-border payment in the financial field, financial bill management and other application scenarios;

The third is non-financial areas, such as energy, luxury goods, telecommunications, Internet and other fields.

Blockchain is a shared distributed database technology. Its advantages are mainly manifested in three aspects: distributed decentralization, no need to trust the system, and non-tampering and encryption security.

1. The meaning of blockchain technology

Blockchain (BlockChain) technology is a technology that uses a decentralized consensus mechanism to maintain a complete, distributed, and non-tamperable ledger database. It enables participants in the blockchain to establish trust relationships without Under the premise of achieving a unified ledger system. Blocks are public ledgers, maintained at multiple points; chains are time stamped (Timestamps) and cannot be forged. Blockchain is essentially a technology that focuses on security and credibility over efficiency.

All current systems have a database behind them, which is a large account book. So who will keep this account book becomes very important. Now it is who’s system who will keep the accounts. The books of each bank are kept by the banks, and Alipay’s books are kept by Ali. But now in the blockchain system, everyone in the system can have the opportunity to participate in bookkeeping. If there are new transaction data changes within a certain period of time, everyone in the system can come to keep accounts. The system will judge the fastest and best person to keep accounts during this time, and write the recorded content to the account book, and Send the contents of the ledger to all other people in the system for backup during this time. In this way, everyone in the system has a complete ledger.

Therefore, these data will become very safe. Tampers need to modify more than half of the system node data at the same time to truly tamper with the data. The cost of such tampering is so high that it is almost impossible. For example, Bitcoin has been in operation for more than 7 years, and countless hackers around the world have tried to attack Bitcoin, but so far no transaction errors have occurred, and it can be considered that the Bitcoin blockchain has proved to be a safe and reliable system. Therefore, it can be considered that blockchain technology is a way for all people to participate in bookkeeping, and it will bring about innovation in bookkeeping methods.

Second, the technical advantages of the blockchain

1. Distributed decentralization

Because every node and miner in the blockchain must follow the same bookkeeping transaction rule, and this rule is based on a cryptographic algorithm instead of credit, and each transaction requires the approval of other users in the network, so a decentralized transaction system is not An endorsement of a third-party intermediary structure or trust agency is required.

At present, whether it is a traditional transaction system or a third-party transaction system, it is based on a central ledger system. The central ledger plays the role of an information custodian. Every transaction requires an endorsement by a third-party intermediary or a trusted institution. It belongs to a centralized trading network.

2. No need to trust the system

In the blockchain network, through the self-constraint of the algorithm, any malicious deception system behavior will be rejected and suppressed by other nodes. Therefore, the blockchain system does not rely on the support and credit endorsement of the central authority.

In the traditional credit endorsement network system, participants need to have enough trust in the central organization. As the number of participants in the network increases, the security of the system decreases. Contrary to the traditional situation, in the blockchain network, participants do not need to trust anyone, but as the number of participating nodes increases, the security of the system increases, and the data content can be fully disclosed.

3. Non-tampering and encryption security

The blockchain adopts a one-way hash algorithm. At the same time, each newly generated block advances strictly in accordance with the time linear sequence. The irreversible nature of time leads to any attempt to invade and tamper with the data information in the blockchain. The exclusion of other nodes can limit related wrongdoing.

4. Machine trust

Advantages-In the past, transactions depended on trust between people. The blockchain may transform transactions into trust between people and machines. The nodes of the entire system exchange data freely and securely on the basis of trust.

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