Blockchain Revolution and My Own Research

What is the Blockchain?

Is a chain of blocks and each block contains some data, a hash of this block and the hash of the previous block. However the first block in a Blockchain is called the Genesis block which is the only block that does not hold a hash of the previous block.

Data being as simple as user information like your name, weight, height or anything you would like.
Hashing is when you input data regardless of the amount which is then put through a hash function which converts the data into an array of numbers and letters, this is called the hash value. Merkle tree is how Bitcoin and Etherum generate the hash value for the block which is when the transactions(each piece of data) in the block hash against each other to eventually get the root hash aka the hash value for the block within the Blockchain, here is a example of a Merkle tree:

There are many cryptographic hash functions to hash input data however which ever one is used they must have some qualities such as; each hash value has to be unique, the speed of hashing execution needs to be fast, and needs to be secure meaning the input data is very well encrypted that its next to impossible to determine the input based on the hash value. For example Bitcoin uses SHA-256  cryptographic hash function.

These blocks link together via there hash values forming the Blockchain and a Blockchain is a distributed ledger that is completely open to anyone.
In its simplest form, a distributed ledger is a database held and updated independently by each participant (or node) in a large network that exists across several locations or among multiple participants that everyone has access to, this is known as decentralised. By contrast, most companies currently use a centralised database that lives in a fixed location. A centralised database essentially has a single point of failure.

Once some data has been recorded inside the Blockchain it becomes next to impossible to change it, this works because of hashing, proof of work mechanism and they are distributed.

­ Proof of work
This is what miners do. Miners compete against each other to complete transactions on the network and get rewarded. In order to win and put that block on the Blockchain they must solve a maths puzzle problem first, to solve the puzzle it requires an enormous amount of computational power. This solves the double spend problem, imagine two miners solve the puzzle correctly and at the same time only one will ever by added to the block and therefore making the other invalid. The network resolves this temporary split by accepting the chain with the most proof-of-work.

Distributed 
as it is decentralised by using peer 2 peer network and everyone is allowed to join, when someone joins this network they get a full copy of the Blockchain. When someone creates a new block, it is sent to everyone on the network. Everyone can always see what is going on.

Hashes 
are used to represent the current state and to ensure its immutability. Once the data is in the Blockchain it is immutable because if you change any data the hash value will change so the blocks will not link causing a domino effect.

The Book Review 
Let's be clear that the decentralised nature of Blockchain technology means that it doesn’t rely on a central point of control, everyone has access. This is peer to peer transactions which involve no middle man. Whereas a centralised system has only one point of control and that is the middle man, only they have access. The middle man holds all the data and profits at the customers expense. An example from the book: If you are working in Canada and you want to transfer money to someone in a different country you will lose up to twenty percent for the transaction charges from the bank, however on the Blockchain its peer to peer so there is no transaction costs to pay. If you are keen to know more, research into "Abra" who are building a global digital asset management system on the Bitcoin Blockchain.

The Tapscott’s explore the potential impact of Blockchain technology. Tracing the rise of Blockchain technology, it assesses the growth of Bitcoin and Ethereum, capturing the essence of the technology: innovation and disruption. The book is ultimately a primer for the contemporary business owner, providing insight into what is required for Blockchain to flourish.

What the Tapscott’s understood was this: technology industries can either be subject to disruption or conform to innovation, and accordingly transform. The Blockchain will be the second generation of the internet. Failure to socialise centralised entities to use the Blockchain will result in entire industries being left behind. The Touch. team have gone one step further, and are now seeking to use Blockchain technology for real world utility that empowers (and pays) the social media user.

The book is difficult at times, written at an academic level by two accomplished and successful businessmen. However, they didn’t an adequate job at trying to distil a significant amount of information into an easily accessible compendium. Of note, is “Part III, Promise and Peril”. This part outlines principles for adoption. In summary, the Tapscott’s believed that Blockchain will be the next generation of data usage (pending scaling, technological demands and societal adoption).