Anthony Idalion - Blockchain: The complete guide to understanding Blockchain Technology for beginners in record time

Blockchain:

The complete guide to understanding Blockchain Technology for beginners in record time

Written by: Anthony Idalion

Disclaimer Notice:

The content of this book is for information and educational purposes only. The content herein should not be considered as advice or recommendations.

The author assumes no responsibility for hardship or damages resulting from the use of the content, or for any omissions or errors however all precautions has been taken for the preparation of this book to be accurate, up to date and reliable as possible.

The author is not responsible for any loss caused from neglectfulness resulting from the use of the content in this book which is provided directly or indirectly.

Before attempting any of the books techniques please first consult a licensed professional.

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Copyright 2017 by Anthony Idalion

All rights reserved. No part of this publication may be reproduced, distributed or transmitted in any form or by any means, without prior written permission from the author.

Introduction: What is Blockchain?

B LOCKCHAIN IS A WAY of revolutionizing business transactions. It was developed in conjunction with Bitcoin technology but can be applied just about everywhere and has enormous implications for education and the future of finance. Blockchain, however, is more basic than just a tool for finance. Therein lies its incredible potential. At the most basic level a ledger. It is a digital ledger of transactions, one that is accessible to the public and keeps track of transactions anonymously. It is an open-source software, which means that anyone can see what is happening and make changes to it. What is unique about it is that through cryptography, the recordings are secure and essentially unalterable. At the same time, any changes made to the ledger are distributed globally. Because essentially anyone can participate in and verify the transaction, it is what Blockchain theorist David Tapscott deems a platform for trust, and at that, one of truth, because it is structured in such a way that fabrication is nearly impossible.

The incredible thing about Blockchain technology is its inherent security. This will surprise newcomers given the reputation of Bitcoin as a currency used for laundering illegal activities, yet precisely because of Blockchain, Bitcoin had its appeal as a source of dependable anonymity. Blockchain technology is being lauded by law enforcement and other government officials as of the most guaranteed secure sources of transactions to be found on the Internet today, a reputation which only improves with time.

The traditional understanding of banking would dictate that the ledger is kept by a bank and it takes time to make updates when a transaction occurs so that both banks have a record of what occurred. Your money is entrusted in with the third party. Blockchain eliminates the need for a third party. How? It puts the power of verification in the hands of those who use it. It goes further than that; unlike banks, which are subject to the threat of compromised security, Blockchain is virtually impossible to hack.

This is a total game-changer for the world of finance. Even with little knowledge of the field, this is apparent. Yet Blockchain is touted as revolutionary far beyond the finance world. This is because the nature of Blockchain technology is such that it can be applied in industries far beyond the financial sector. In this globalized world, goods are exchanged across continents at rates unimaginable even a decade earlier. What if there was a way for this to occur even faster? Blockchain has that potential. This is because the distribution at an almost real-time pace allows for even faster collaboration.

Beyond transactions of value, Blockchain can also be used to exchange data. The possibilities are nearly endless with the right frame of reference and understanding of how Blockchain works. One day it could even be used to institute massive decentralized voting and thus eliminate the need for larger governing bodies. To reach that point, an understanding of the components of Blockchain that make it useful in contexts beyond Bitcoin is in order.

Chapter 1 The History of Blockchain

B LOCKCHAIN IS CONSIDERED to be a silent revolution, much like the revolution of smartphones was. Just two decades ago, phones were fixed in place and you couldnt take them with you. Now, people are building entire business empires right from their mobile devices. It is believed that blockchain will likewise have a large impact on society, especially as time carries on.

Essentially, blockchain is a digital ledger that records transactions which are made in bitcoin or other cryptocurrencies. Bitcoin was the first major blockchain innovation, and was also considered to be a digital experiment. Despite its experimental origins, bitcoin is now worth between $10-$20 billion altogether and is used by millions. The market is large and continues to grow.

It was through bitcoin that blockchain was founded. The creators realized that you could separate the underlying technology from the bitcoin currency and it could be used for a variety of different organizational functions. After this discovery, virtually every major financial institution began researching blockchain and how it could benefit their businesses. It is expected that at least 15% of banks are going to start using blockchain by the end of 2017.

After the innovations of bitcoin and blockchain, there was a third innovation known as smart contract. This smart contract embodies a second-generation variation of the blockchain system, which has been called Ethereum. This system has built small computer programs directly into blockchain. The programs that were built in enable blockchain to represent loans and bonds, in addition to currencies. Ethereum smart contract has expanded to now have a market cap of approximately a billion dollars, and it is said that there are hundreds of additional projects that are heading towards the market with it.