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!!! Overview[1]
[{$pagename}] is a [peer-to-peer] [Distributed Ledger Technology] ([DLT]) shared by Untrusted participants, with strong guarantees about accuracy and consistency.
[{$pagename}] [applications] can establishes [trust], [accountability] and [transparency] while streamlining business processes.
[{$pagename}] is generally used to describe the [Protocol] for the [Distributed Ledger Technology] which forms the heart of the [Cryptocurrency], [Bitcoin].
The concept of the [{$pagename}] lies at the heart of all [cryptocurrencies|Cryptocurrency]. [{$pagename}] is the decentralised historical record of changes in the ownership of an asset, be it simply spending a [bitcoin] or executing a complex [Smart contract] in one of the second-generation cryptocurrencies such as [Ethereum]. Whenever a [cryptocurrency] transaction occurs, its details are broadcast throughout the entire [cryptocurrency] network by the spending party, ensuring that everyone has an up-to-date record of ownership. Periodically, all the recent changes get bundled together into one “[block]”, and added to the historical record. And so the [{$pagename}] – a linked list of all the previous blocks – serves as the full and complete record of who owns what within the [{$pagename}] network.
Think of [{$pagename}] as an [Operating System] for interactions.
* [{$pagename}] is a permanent, [Cryptographic] tool that makes it easier to create cost-efficient networks without requiring a [Registration Authority].
* [{$pagename}] is [database] technology that works on a [network] such as the [Internet]. [Entities] install the [application] locally and the "nodes" all hold a copy of the [database].
* [{$pagename}] No central server holds control over the [database]. (ie [Non Permissioned System])
* [{$pagename}] database is structured as a [ledger|Distributed Ledger Technology] or a registry of entries into the [{$pagename}].
* [{$pagename}] entries are aggregated into data structure [blocks]. The blockchain consists of [blocks] that hold "time-stamped" batches of valid entries.
!! [{$pagename}] [Blocks]
* [Blocks] record and confirm when, and in what sequence, transactions enter and are logged in the [{$pagename}].
* Each block includes the "[hash]" of the prior block, which links the [blocks] together.
* The linked blocks form a chain, with each additional block reinforcing those before it. From this process comes the name [{$pagename}].
* Blocks are created by [Entities], in [Bitcoin] known as "miners", who use specialized software or equipment designed specifically to create [blocks].
* [How many Blocks are there?|https://blockexplorer.com/api/status?q=getBlockCount|target='_blank']
* [Bitcoin blocks] just keep getting added to the end of the chain at an average rate of one every 10 minutes.
* [Bitcoin blocks] are for proving that [transactions] existed at a particular time. [Transactions] will still occur once all the [Bitcoins] have been generated, so blocks will still be created as long as people are trading [Bitcoins].
!! [{$pagename}] [Network]
Entries - or transactions - are passed from or node to node on a best-effort basis.
* The specific blockchain [protocol] defines a valid transaction.
* In [Bitcoin], a valid transaction must be [digitally signed|Digital Signature], spend one or more unspent outputs of previous transactions, and the sum of transaction outputs must not exceed the sum of inputs.
* Other [{$pagename}] [Protocols] may use a different method of validation, such as third party certification, or none at all.
* Creation of [Bitcoin] [blocks], miners are incentivised to create [blocks] by two types of rewards: a pre-defined per-block award and fees offered within the transactions themselves, payable to any miner who successfully confirms the transaction.
* [Distributed Ledger Technology] applications may incentivise block creators differently. If the [{$pagename}] application is run for internal use within a bank or a group of banks these may simply pay third parties or employees to perform this task.
!! [Transparency]
The original [Bitcoin] code has been released under an [Open Source] [License] and all [Blockchain 2.0] applications have also been [Open Source].
[Open Source] code provides the [blockchain] with important [transparency], which adds to the [trust] in the system and its ledger that comes with the [Distributed Consensus] [database] structure. All users of [{$pagename}] can verify if the underlying code has any security flaws or contains any back doors to allow tampering.
[Bitcoin] is an is an [Non Permissioned System] which implies the information about all transactions on the [{$pagename}] is accessible to all users. This [transparency] allows all users to check their copy of the [{$pagename}] for consistency with other users’ copies.
In addition, any well-connected node is able to determine, with reasonable certainty, whether a transaction does or does not exist in the [{$pagename}].
Any node that creates a transaction can, after a confirmation period, determine with a reasonable level of certainty whether the transaction is valid, able to take place and become final (i.e. that no conflicting transactions were confirmed into the [{$pagename}] elsewhere that would invalidate the transaction, such as the same [cryptocurrency] units "double-spent" somewhere else).
!! [{$pagename}] [Privacy Considerations]
The [{$pagename}] has no concept of a [user]. There are erroneous references to user addresses as they are wallet addresses which are assigned to a Wallet which is owned by a user. These wallet addresses provide [pseudonymity] for users.
[Identity Correlation] of these wallet addresses with some other [Identification] values are required to determine the [End-User].
The [Bitcoin] network strives to preserve the [privacy] of its users by allowing nodes to access the ledger under a [pseudonym]. To transfer a [Bitcoin] the node does not have to reveal the identity of the [Natural Person] or [Organizational Entity] operating the node. All that is needed is that the node makes the transaction with a [digital Signature] with a valid [Private Key].
[{$pagename}] transparency may be a challenge for the [privacy] of its user.
* the [Bitcoin address] of the sender
* the [Bitcoin address] of the receiver
* the [DateTime]
* the [Unique Identifier] for the [Block]
* the [Bitcoin] [Blockchain] records the [Payment Transaction] amount in [BTC]
are published __permanently__ on the [Bitcoin] [Blockchain] and available to everyone to track and the [Bitcoin] [Blockchain] records the [Payment Transaction] amount in [BTC].
Unless the [Payment Transaction] is done face-to-face, then there is also a [Telecommunications] system involved which has additional information about you.
There are many ways you [Digital Identity] can be linked to a wallet address.
* Some people share their address publicly. __DO NOT DO THIS__
* The exchange where you bought your [bitcoin] from has both your [Digital Identity] and your wallet address.
* [Merchants] you pay can make the association through:
** the [Bitcoin address] of the sender
** [Telecommunications] you did for the [Payment Transaction]
At least two companies, [Elliptic|https://www.elliptic.co/|target='_blank'] and [Chainalysis|https://www.chainalysis.com/ |target='_blank'], [Cluster analysis] and other techniques of [Identity Correlation] to [bitcoin] addresses, and compiling all their insights into commercialized [databases] that track all [bitcoin] activity in an effort to [De-anonymization] [Bitcoin].
However, some [Organizational Entities|Organizational Entity] are proposing [Blockchains] as [Permissioned Systems] which demands a link to a [entity]’s [Digital Identity], and this [Personal data] will be accessible for all who use the [{$pagename}]. This creates challenges in respect of [Regulatory compliance] even though some of the people demanding the [Permissioned Systems] are [Government Entities|Government Entity]
!! Beyond [Cryptocurrency]
[{$pagename}] technology has already grown beyond just [Bitcoin], and is now being used, by ShoCard and others, for systems other than currency transactions. If you are technically inclined, you can find the original paper describing [Bitcoin] and the [{$pagename}] [here|https://bitcoin.org/bitcoin.pdf|target='_blank']. [For a simpler explanation|https://youtu.be/s4g1XFU8Gto|target='_blank']
!! More Information
There might be more information for this subject on one of the following:
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* [#1] - [Blockchain 2.0, smart contracts and challenges|http://www.twobirds.com/en/news/articles/2016/uk/blockchain-2-0--smart-contracts-and-challenges|target='_blank'] - based on data observed:2016-06-18
This page (revision-1) was last changed on 29-Nov-2024 16:16 by UnknownAuthorTop