What is BlockChain, Bitcoin Cryptocurrency? The IBM Blockchain for Dummies Book Excerpt.
If you are little confused about the Blockchain technology and Bitcoin Cryptocurrency you need not to worry, this post will hopefully dummy down this technology into everyday language. Basically in a nutshell it is a secured private cloud database on the internet that is managed by a group of people. The database block (file) cannot be retroactively altered, is time stamped and is connected on an encrypted network. Blockchain was invented by a person (or group of people) using the name Satoshi Nakamoto in 2008 to serve as the public transaction ledger of the cryptocurrency bitcoin. Today, this technology is that backbone for 130 bitcoin currency exchanges worldwide and Bitcoin ATM machines are spreading. Bitcoin due to the anonymity afforded users has also been the currency of choice of scammers according to the latest police bulletins for CRA scams.
If this has piqued your curiosity here is a book excerpt from the IBM Block Chain for Dummies written by Manav Gupta and published by John Wiley & Sons., Inc.
Grasping Blockchain Fundamentals
Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. An asset can be tangible (a house, a car, cash, land) or intangible (intellectual property, patents, copy- rights, branding). Virtually anything of value can be tracked and traded on a blockchain network, reducing risk and cutting costs for all involved.
That’s the elevator speech for blockchain. In the rest of this chapter, you review additional details to help you more fully appreciate this technology and its potential for streamlining business operations.
Tracing Blockchain’s Origin
You can gain a deeper understanding of blockchain by exploring the context in which it was developed: the need for an efficient, cost-effective, reliable, and secure system for conducting and recording financial transactions. In this section, I provide that context and describe the characteristics of blockchain that make it such a suitable solution.,
The Shortcomings of Current Transaction Systems
Throughout history, instruments of trust, such as minted coins, paper money, letters of credit, and banking systems, have emerged to facilitate the exchange of value and protect buyers and sellers. Important innovations (for example, telephone lines, credit card systems, the Internet, and mobile technologies) have improved the convenience, speed, and efficiency of transactions while shrinking — and sometimes virtually eliminating — the distance between buyers and sellers.In spite of this, many business transactions remain inefficient, expensive, and vulnerable, suffering from the following limitations:
Cash is useful only in local transactions and in relatively small amounts.
- The time between transaction and settlement can be long.
- Duplication of effort and the need for third-party validation
- and/or the presence of intermediaries add to inefficiencies.
- Fraud, cyberattacks, and even simple mistakes add to the cost and complexity of doing business, exposing all participants in the network to risk if a central system — such as a bank — is compromised.
- Credit card organizations are walled gardens with a high price of entry. Merchants must pay the high costs of onboarding, which often involves considerable paperwork and a time-consuming vetting process.
- Half of the world’s people don’t have access to bank accounts, requiring them to develop parallel payment systems to conduct transactions.
- Limited transparency and inconsistent information hinder the efficient movement of goods in the shipping industry.
Transaction volumes worldwide are growing exponentially and will surely magnify the complexities, vulnerabilities, inefficiencies, and costs of current transaction systems. The growth of ecommerce, online banking, and in-app purchases, coupled with the increasing mobility of people around the world, have fueled
The Birth of Blockchain
Bitcoin is actually built on the foundation of blockchain, which serves as Bitcoin’s shared ledger. Think of blockchain as an operating system, such as Microsoft Windows or MacOS, and Bitcoin as only one of the many applications that can run on that operating system. Blockchain provides the means for recording Bitcoin transactions — the shared ledger — but this shared ledger can be used to record any transaction and track the movement of any asset whether tangible, intangible, or digital. For example, block- chain enables securities to be settled in minutes instead of days. It can also be used to help companies manage the flow of goods and related payments, or enable manufacturers to share production logs with original equipment manufacturers (OEMs) and regulators to reduce product recalls.
The takeaway lesson: Bitcoin and blockchain are not the same. Blockchain provides the means to record and store Bitcoin trans- actions, but blockchain has many uses beyond Bitcoin. Bitcoin is only the first use case for blockchain. (end of Book Excerpt, if you would like copy it is available at this link, courtesy of IBM)
The week of April 22-28 is Blockchain week in Toronto where there will be 40 events exploring the new applications of Blockchain in the marketplace. “Toronto has become a globally recognized hub for blockchain technology,” says Toronto Blockchain Week co-founder, Addison Cameron-Huff. “Toronto Blockchain Week is a celebration for our startups, enterprises, professional firms, and research networks. Blockchain Revolution Global is the anchor conference for the week that will showcase the transformative potential of blockchain technology.”