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Using the Blockchain Technology

Hillary Cyril | Editor, TechAnnouncer




If you are unfamiliar with what a Blockchain is, this article will shed some light on the subject. A Blockchain is simply a type of public, decentralized ledger system to transfer ownership, secure records, manage transactions, verify asset ownership, track asset balances, ensure the financial security, provide privacy, guarantee ownership and portability, and transfer value. The concept of this particular ledger comes from the “blockchain”, a group of computer networks that function in much the same way as the public Internet or a grid system. This public network of computer networks is made up of a network of computers, which all work together to process the real-time data and verify the validity of each transaction.

Each user is provided with their own personal “blockchain” or “chain” which they use to add and delete transactions as they see fit. No one else needs access to this information, except for the individuals who operate the validating computer systems on the chain. Everyone else’s role is to monitor the ledger for irregularities, and flag those that they believe are suspicious. This brings us to the next point…

There are two types of networks that work together in the background to provide this service to users. The first is called a “proof-of-stake” network, which is much like the proof of funds system used in traditional online banking. When you make an investment, you stake of dollars to receive that much money back in return. Once your stake is converted into actual money by the sale of one of your blocks, your balance will be updated, reflecting the change.

Block Tech

The second type of network that helps to provide the backbone of the blockchains is referred to as “Byzantine Fault Tolerance” (also called BFT) chains. What this means is that every block is followed by a series of corresponding and independent confirmations. Transactions are performed by users who sit at computers that sit at various other Internet connections, as well. Because of the nature of how the transactions are processed, there is never a situation where a user is able to double-spend or forge the transactions or take control of the ledger. In other words, the entire system is self-executing and self-verifying.

This brings us to the third aspect of the use of the cryptocurrency called “peer-to-peer lending.” With this type of lending, or simply referred to as “peer-to-peer lending,” individuals who are interested in obtaining money need only find an open lending application. The individual can then browse through the list of available transactions and select the one that makes the most sense for his or her particular circumstances. No capital is required; there is no paperwork involved. This is perhaps the best aspect of the use of the blockchain, the most notable aspect being that all these transactions can take place with very little or no additional effort on the part of the individual or company doing the financing.

As a result of the three aspects described above, the new block technology has created a new environment for the global marketplace. Rather than depending on a single institution or a single party for the safekeeping of the global ledger or the forward progression of the chain, the blockchain can be accessed and updated by any user across the globe, instantly and easily. Because of the nature of the new block technology, which is essentially permission-based, this opens the door for many new applications. For example, there is the potential to expand the ledger, make it publicly accessible, and allow anyone who has legitimate proof of ownership to access this information. There is also the potential to use the ledger for other purposes, such as the transfer of funds among participating businesses and organizations, as well as the recording of real-time trade data. The ultimate purpose of the new blockchain is, of course, to create a more global marketplace, where trade information is made available to every participant.

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