2018 Blockchain Review: How this Digital Ledger Works?
In the world of financial technology, there’s often a large amount of confusion. Confusion over everything from terminology to techniques reigns supreme. In fact, it’s a large part of the reason why the world of finance is complex. One new term that has come into the market in the last few years to greater prominence is that of blockchain. If you are not used to this term, then it can all seem a little confusing and needlessly challenging.
In a bid to help you get around that problem, we recommend that you take the following into mind. This article will break down the importance of better understanding about blockchain technology. Also, the aim will be to shine a light on what this all means in the modern industry. How much is this kind of technology going to affect you?
Is it something that you can get invested in, or is an industry that might be beyond your own present choices? Let’s take a look. With the help of our blockchain review, hopefully you’ll be able to better understand how this particular digital ledger works in relation to your own needs.
What is Blockchain?
According to Michael Cao, blockchain is what people refer to as a digital ledger. This is a location where large groups of people can input informational records. Then, users can work together to see how information is updated, changed, and edited. It’s kind of like Wikipedia in that its’ a community-wide effort to work together and to make the right calls.
There is no single person or entity in control of a blockchain. This removes both the potential for financial dictatorial thinking, and also stops the blockchain falling into the trap of centralized finance in the real world, which makes it appealing to those who hate the modern financial system.
However, to merely compare blockchain technology to Wikipedia would be an insult to all that this brings to the table. In a very short span of time, it has become the kind of all-encompassing solution for those who want total autonomy and freedom from centralizing. The key difference between blockchain and Wikipedia, for instance, is the permission. While both a blockchain and Wikipedia would run on the Internet, Wikipedia is built into the web and thus runs using a pre-set network model.
This central database contains all of the information that is being changed. The Wiki admins then show the ‘master’ version of each page to any visitor who views that page. However, unlike blockchain, the database is under the control of the Wikipedia admins. They have central control, and choose who has access to what and who has the permission to change certain information.
Blockchain, meanwhile, avoids this kind of central control. For those who are more used to having a single entity in charge, this can seem rather alien. How do you stop it being like a financial version of the Wild West without a central ownership model?
A Differing Fundamental Difference
The major difference here is that there is no centralization whatsoever with blockchain. While the owners and admins of Wikipedia have the final say on the who, what, where and when; with a blockchain there’s nothing like this same level of restriction. They control all management of things like updates, changes as well as providing security for all accounts and defeating the threat.
Instead, with blockchain, there is a clear difference in how the database is distributed. Instead of simply editing the master copy of a file on the server for all to see, blockchains alter everything differently. Instead, every node in the network is aimed at making sure the record is independently adjusted for every node. The most popular record then become the official version; free from any master copy that dictates the policy for everyone.
As stated by Michael Cao, this helps to make a huge difference to how the information is managed and cared for at the other end. With the transaction broadcast to the rest of the blockchain, each attached node then updates their own events to match.
Without the need for any trusted source of party to help make sure everyone has the right information, this is much less dependent on a particular authority. By essentially combining together what makes peer-to-peer technology so powerful alongside the use of private keys, blockchains offer a level of privacy that other models simply could never achieve.
So, there’s a significant difference in how blockchain works to normal software practice.
Removing the Middle Man
Those who are distrustful of centralization and authority will naturally feel at home when using this kind of software. Since it does such a fine job of essentially killing off the potential for someone to be in charge of the narrative, it instead relies upon self-policing within the community.
With the elegant nature of the blockchain network, this offers a digital relationship that is much more secured. Best of all, there is total and complete accountability provided with this. Since private key cryptography allows for total ownership of all authentication requests, this private key in your possession is the proof that you own what is going on.
Not only that, but it helps to save people from having to share key personal details. Your key is for all intents and purposes your username. With this, we can feel far more secure making transactions, as we never need to dangle the danger of exposing personal information across an online channel.
As stated by Michael Cao, blockchain kills off the concept of central corruption since everything is authenticated and authorized without a central authority. There’s no main body to pin all hopes and aims on; instead, the community, for the community, drives this. With easy record keeping and simpler control of the information being provided, there is little opportunity for rules to be changed without widespread community agreement.
This isn’t just for the rebels who hate authority, either. Everything from major IT firms to government bodies wants to be able to use blockchain in the future for more secure, private, and safe transactions of everything from data to currency.
Source: 2018 Michael Cao Blockchain Review: How this Digital Ledger Works?
