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What is Blockchain Technology? [All the knowledge you need to know]

What is Blockchain?

The Origin of Blockchain

In 1991, Blockchain was described by W. Scott Stornetta and Stuart Haber. The purpose is to timestamp documents so that they become immutable. This means that you cannot modify the date in any way.

In 2008, the world financial system collapsed. Golden time for an anonymous person or group called Satoshi Nakamoto created an open source protocol called Bitcoin.

Do not misunderstand Bitcoin “Bitcoin is an asset class and is important if you are an investor”. The most interesting thing is not the price going up or down, it is Blockchain technology.

Blockchain for the first time in the world!

What is Blockchain?

Blockchain is a sequence of blocks containing information. Right from the name itself says it all – block (block) and chain (chain).

Blockchain It is likened to a main accounting book (ledger) of a company. where all activities related to the company's money are very closely monitored.

In this case Blockchain is a ledger operating in the field of technology, and the data stored is digital data.

Watch now video below to understand more about Blockchain Blockchain Technology

What is blockchain used for?

Blockchain is used to store information in interconnected blocks of information. It is managed by everyone participating in the system.

Instead of an individual 3rd party like the state or a central bank. It also allows secure transmission of data with a complex encryption system, which has expanded over time.

Moreover, this technology is created to resist data changes in the system. It also has a very special feature that the data transmission does not require an intermediary to confirm the information.

Because in the Blockchain system, there are many independent nodes that are able to authenticate the information in the system without requiring "signs of trust".

Information when entered in blockchain blockchain then it will not be changed and can only be added with the approval of everyone in the system.

This is a system that ensures very high security for data against the risk of being stolen.

Especially sensitive data such as online banking accounts, payment card accounts, etc. Even if one part of the blockchain system is hacked, the other parts will not be affected and will continue to work to protect it. information protection.

Watch the video of a Blockchain expert's perspective now

Structure of Blockchain

Each block will be stored in 3 parts:

  • Data
  • Hash of the current block
  • Hash the previous block

block

Data

The data will depend on the type of Blockchain. For example, Bitcoin's blockchain will contain transaction data.

Transaction data includes: Information about the sender, receiver and the amount of coins sent.

Hash of the current block

Hash of the current block as an identifier. It is unique and does not overlap like our fingerprints.

Hash of the previous block

Thanks to this hash, the linked blocks create a chain. However, the first block will not be associated with any other blocks. Because it was created first.

This first block is called Genesis block, which translates into Vietnamese as "Primitive Block".

Structure of Blockchain

Main features of Blockchain technology

Blockchain technology (Blockchain technology) Acts like a ledger that records all transactions that occur in the system. The main features of blockchain can be mentioned as:

  • Can't fake, can't destroy blockchain chains:
  • Invariant
  • Data security
  • transparent
  • Smart contract

Can't fake, can't destroy blockchain chains

Blockchain chains are nearly indestructible. Theoretically, only quantum computers can interfere with and decipher the blockchain.

It was only completely destroyed when there was no internet left globally.

Invariant

The data in the blockchain is almost immutable. It can only be modified by the person who created it.

But it has to be the consensus of the nodes on the network and that data will be kept forever.

Data security

The information and data in blockchain chains are distributed and absolutely safe. Only the holder of the private key has access to that data.

Data security

transparent

Anyone can track the path of data in the blockchain from one address to another and can track the entire history on that address.

Smart contract

Smart contract are digital ones embedded by an if-this-then-that (IFTTT) code in the system.

Allow them to execute on their own without the need for a third party. Blockchain does not need a third party to participate in the system.

It ensures that all parties involved are aware of the contract details and that the terms are automatically implemented once the conditions are met.

Smart Contract

Why is it impossible to edit data on Blockchain?

Hash Mechanism

To modify the data of a block, Hash of that block will be changed. Blocks after it the modified block becomes invalid. Because right now Hash of the previous block not the same as the modified one.

So the only way to modify a block's data is to make all the blocks after it valid.

Change information of a block

Consensus Mechanism

To make the block valid you have to tamper with the blocks and change the Hash at a time. But because date calculator can calculate very fast.

Every second, they can compute hundreds of thousands of Hashes. This affects the bounce rate.

At this time, thanks to the pure copper mechanism, it will decide who will add new blocks. The purpose is to keep the string from being overwritten. Thereby ensuring integrity and security.

Peer-to-Peer Network (P2P Network)

Blockchains using architecture peer-to-peer network instead of a management center. This means anyone can join the network.

Each individual in the network acts as a node (urge). They will receive a full copy of the blockchain. They use this copy to confirm everything is still in order.

All nodes create consensus. If this consensus is greater than 50%, the block is valid and added to the blockchain.

Peer-to-peer networks combined with consensus form a layer of protection against malicious activity.

How is blockchain classified?

In the Blockchain system divided into 3 main types: Public, Private and Permissioned:

Public blockchain

Public: This is a blockchain system where anyone has the right to read and write data on the Blockchain.

The process of validating transactions on this Blockchain requires thousands or even tens of thousands of participating nodes.

Therefore, to attack this Blockchain system is impossible because the cost is very high. Public blockchain example: Bitcoin, Ethereum...

Public blockchain

Private blockchain

Private: This is a blockchain system that allows users to only read data, not write because this belongs to an absolutely trusted third party.

This third party may or may not allow the user to read the data in some cases. The third party has full authority to decide on any changes on the Blockchain.

Since this is a Private Blockchain, the transaction confirmation time is quite fast because only a small number of devices are required to validate the transaction.

For example: Ripple is a form of Private Blockchain, this system allows 20% of nodes to be fraudulent and only needs the remaining 80% to work stably.

Private Blockchain

Permissioned blockchain

Permissioned: Also known as Consortium. This is a form of Private Blockchain but adds certain features.

It combines “belief” when participating in Public and “absolute faith” when participating in Private.

For example, banks or joint venture financial institutions will use their own Blockchain.

Permissioned blockchain

Major Versions of Blockchain

Now blockchain technology There are 3 main versions including:

Blockchain 1.0

Blockchain 1.0 – Currencies and Payments: An early and early version of the blockchain.

The main application of this release is crypto-related work. It includes currency conversion, remittance and digital payment system creation.

This is also the field that is familiar to many people, sometimes quite a lot of people mistakenly believe that Bitcoin and Blockchain are the same.

Blockchain 2.0

Blockchain 2.0 – Finance and Markets: This is the 2nd version of the blockchain.

Its application is in banking and financial processing: scaling of Blockchain, bringing integrated blockchain into financial and market applications.

Assets include shares, checks, debt, title, and anything related to an agreement or contract.

Blockchain 3.0

Blockchain 3.0 – Design and Operational Monitoring: Currently this is the highest version of the blockchain.

In this version, Blockchain technology will go beyond the border to only serve the financial sector. It is geared towards other areas such as education, government, health and arts…

Consensus Mechanisms in Blockchain

Consensus mechanism in Blockchain can be understood as the way that every administrator in the blockchain system can agree for a transaction to occur in the system. Here are the common types of consensus mechanisms in blockchain:

Proof of Work 

Proof of Work (Proof of Work) is the most popular consensus mechanism, used in Bitcoin, Ethereum, Litecoin, Dogecoin and most cryptocurrencies. This is a consensus mechanism that consumes a lot of power.

Proof of Work

Proof of Stake 

Proof of Stake (Proof of Shares): This is a common consensus mechanism in Decred, Peercoin and in the future Ethereum and many other cryptocurrencies. This consensus mechanism is more decentralized, consumes less energy and is not easily threatened.

Proof of Stake

Delegated Proof-of-Stake

Delegated Proof-of-Stake: This is the common consensus mechanism in Steemit, EOS, BitShares. This consensus mechanism has low transaction costs; extendable; high energy efficiency. However, it is still somewhat centralized because this algorithm chooses trusted people to authorize.

proof of authority

Proof of Authority: This is a common consensus mechanism commonly found in POA.Network, Ethereum Kovan testnet. This consensus mechanism has high performance, good scalability.

Proof-of-Weight

Proof-of-Weight (Proof of Volume / The bigger the better): This is the common consensus mechanism in Algorand, Filecoin.

This consensus mechanism is customizable and well extensible. However, the process of accelerating the development will be a big challenge.

Byzantine Fault Tolerance

Byzantine Fault Tolerance This is the common consensus mechanism in Hyperledger, Stellar, Dispatch, and Ripple.

This consensus mechanism is high yield, low cost, and scalable. However, it is still not completely reliable.

This algorithm has 2 versions:

  • Practical Byzantine Fault Tolerance (Anti-Fraud Consensus / Byzantine Generals Encircle Blockchain in Reality)
  • Federated Byzantine Agreement (Byzantine Union by consensus)

Directed Acyclic Graphs (Topical Algorithms): This is a consensus mechanism commonly found in Iota (Tangle technology), Hashgraph, Raiblocks/Nano (Block-lattice technology), which is a Blockchain competitor.

Applications of blockchain in life

The first widely known useful application of blockchain technology is probably Bitcoin and others virtual money.

But now Blockchain is revolutionizing almost every industry. Here are a few practical examples of the application of blockchain technology in life.

Watch a video about Blockchain's influence now

Today I will describe the application of Blockchain according to the combination of each economic sector in Vietnam so that you can easily imagine!

Applications in industry and services

Enterprises apply blockchain in their services

Blockchain technology application

Business Services

Microsoft and ConsenSys are collaborating to make Ethereum Blockchain as a Service (EBaaS) available on Microsoft Azure so Enterprise customers and developers can have a blockchain development environment.enterprise application blockchain

Google is also said to be working on a proprietary blockchain to support the business. Parent company Alphabet is developing a distributed ledger that third parties will be able to use to store data, allegedly related to Google's cloud services for businesses.

Energy industry

A project full of focus on distributed energy and water systems using blockchain technology in Fremantle, Australia, . Solar panels are being used in a sunny area to collect electricity, which is then used to heat water and provide power, and the data is recorded on the blockchain.

Chile's National Energy Board has begun using blockchain technology as a means of validating data regarding the country's energy use. Sensitive data will be stored on the blockchain as part of an initiative to help modernize and secure the South American nation's electrical infrastructure.

Application in agriculture and seafood industry

Fishing

Blockchain is currently being used to support sustainable fishing. Illegally caught fish is an endemic problem in the industry, and distributed ledger technology provides a means to prove where fish was caught, processed and sold. This “net-to-plate” chain allows inspectors to determine whether fish are coming from areas notorious for human rights abuses or from countries affected by economic sanctions.

Agriculture

Do you know where your food, clothes, etc come from? Supply chain management is an extremely complex field and often involves dozens of intermediaries from production to purchasing.

So how can we ensure the quality, transparency, and reliability of products on a long journey from producer to consumer? The answer is blockchain.

  • Food industry: Is a Blockchain application that can improve transparency and efficiency in figuring out what foods might be contaminated and where throughout the supply chain.
  • OriginTrail: Is a blockchain platform that allows consumers to know where the food goods they buy come from and how they are produced.

Agriculture

Blockchain application in construction

Real Estate

Ukraine is honored to be the first country to use blockchain to facilitate a property agreement. A property has been sold by prominent crypto advocate and TechCrunch founder Michael Arrington.

The deal is enabled with the support of smart contracts on the Ethereum blockchain and is intended to be the first of many completed by Propy, a startup specializing in real estate transactions. blockchain-based.

Rail

Railway operator Novotrans in Russia is using blockchain technology with the goal of improving the speed of its operations. One of the largest stock operators in the country, will use blockchain to record data regarding repair requests, inventory and other issues related to their operations. The idea is that blockchain records will be more resistant to tampering and data corruption.

Land use rights

The Georgia government uses it to register land titles. They created a custom designed blockchain system and integrated it into the digital records system of the National Public Registry (NAPR). Georgia is currently taking advantage of the transparency and fraud reduction offered by blockchain technology.

Application in waste management activities

Waltonchain's RFID technology is being used by the Smart Waste Management System in China. Using Walton's blockchain, the project will enable waste level monitoring to improve operational efficiency and optimize resources.blockchain-in waste management

Applications in the wholesale and retail industry 

Mobile payment (Mobile payment)

Cryptocurrencies with underlying blockchain technology are being used to facilitate mobile payments in a wide range of projects. One of the latest initiatives announced, launching in the fall of 2018, will involve a consortium of Japanese banks. They will use the technology of Ripple to enable instant mobile payments.

Supply Chain

Supply chain management is considered one of the most beneficial use cases for blockchain, making it ideal for industries where goods are moved through many different hands, end-to-end, or manufacturer to store. IBM and Walmart have teamed up to launch the Blockchain Food Safety Alliance in China. The project, run in conjunction with Fortune 500 company JD.com, is designed to improve food safety and tracking, making it easy to verify that food is safe to consume.

Blockchain application in transportation and warehousing

Shipping

Blockchain's suitability for recording shipping data is obvious. Several projects have distributed ledger technology to work in this area. Use it in the maritime logistics industry to bring transparency to the bureaucracy that is inevitable in international trade.

The two respective industry giants IBM and Maersk have come together to create the world's first shipping blockchain platform, TradeLens.blockchain application in transportation

Applications in financial activities, banking and insurance.

Finance, Banking

Bitcoin Atom

Bitcoin Atom is a new fork of Bitcoin that allows easy cryptocurrency exchange without transaction fees. You cannot be hacked when trading. It makes Bitcoin truly decentralized.

This technology is based on atomic swaps. It is considered an invaluable tool for exchanging cryptocurrencies and does not require a trusted third party.

But for now, the widespread adoption of atomic swaps has been prevented because they require high technical skills. Bitcoin Atom can only partially solve this problem.

security

Securrency is a trading platform for cryptocurrencies and several types of assets, including non-cashable ones.

All are exchanged through Securrency tokens. The project allows cryptocurrencies to be traded outside of their dedicated exchanges.

Ripple

Ripple aims to be a global payment solutions provider. They will connect payment service provider banks, businesses and digital asset transactions. Transactions are settled instantly, according to global demand.

ABRA

ABRA is a global app and crypto wallet that allows you to buy, invest and store 20 cryptocurrencies, including Bitcoin, ethereum, litecoin…

Aeternity

Aeternity is a highly scalable blockchain platform. It can be used for any application that requires high transaction speed.

Includes smart contracts generated from on-chain, nano and micro payments.

Insurrance

Blockchain in the insurance industry is often talked about, but many people do not know the technology has been implemented. For example, insurance company American International Group Inc, in partnership with International Business Machines Corp., completed a pilot of a multinational policy known as smart contracts, against Standard Chartered Bank PLCs and had complex international scope management plan through blockchain.

Blockchain application in mining

Diamond

De Beers Group, the world famous diamond company, now has its own blockchain called “Tracr” up and running, designed to set a digital record for each diamond registered on the platform. foundation.Blockchain application in diamond

With concerns about the provenance of diamonds and the ethics associated with their provenance, along with the risk of being swapped for something less valuable. Along the chain from mining to retail, blockchain is a natural fit. Because each record is undeletable, it ensures the data for each stone lasts as long as it is a diamond itself.

Oil

One of the leading players in the commodity market, S&P Global Platts, is testing a blockchain solution that is being used to record oil storage data. Weekly inventory will be stored on the blockchain, reducing the need for manual data management and minimizing the possibility of human error

Carbon

In March 3, IBM launched the Blockchain Food Safety Alliance in conjunction with the Energy-Blockchain Lab, as a means of tracking carbon assets in China. This creates a measurable and auditable system to track emissions and facilitates a tradable market for companies looking to offset their energy consumption while encouraging encourage green industrial activities.

Energy

One of the biggest challenges facing the energy industry. Companies whose trading practices provide surplus value need record keeping and it is infallible. Tracking energy allocation in real time and ensuring efficient distribution through the supply chain requires multiple data points and also requires close cooperation between all entities.

Every day, blockchains project real world usage increases. From logistics to fine arts, it's hard to find an area untouched by this transformative technology. Blockchain has reached a point where the technology has proven itself superior to what it is now.

Blockchain application in education

In 2010, the doctoral degree (PhD) of former Microsoft China president Tang Jun received from Pacific Western University raised suspicions.

Investigators discovered that not only was the school unaccredited, but the price of degrees was too cheap. Just have $ 2.595 and students do not need to study anything.

A year later, dozens of other senior managers were also implicated in other large-scale cases of fake degrees from dubious programs.

Those who register to study only study "for the sake of law". Therefore, it is absolutely necessary to ask for Transparency.Education

Intellectual Property

Piracy is a problem that has been going on for a long time. It seems that there is still no solution that can be completely solved until blockchain appears. Perhaps, at present, this technology is the only solution to this problem.

Even if you're a musician, you always want to make sure you get royalties when your music is released. Or simply assert property ownership.

Blockchain technology can help us protect our assets by creating an undisputed record of ownership in real time.

Intellectual Property

Blockchain application in food service

Blockchain is also accelerating in the alcohol and beverage industry. In March 3, news emerged that premium whiskey brand Ailsa Bay would release what it believes to be the world's first scotch whiskey tracked with a blockchain-based system.Food Service

While later in May, Big Four auditing firm E&Y announced its proprietary blockchain solution for a major new platform that helps consumers across Asia determine quality, provenance and authenticity. of imported European wines.

Blockchain application in information and communication

Ads

The New York Interactive Advertising Exchange in partnership with Nasdaq is using blockchain to create an electronic marketplace where brands, publishers, and agencies can buy ads. The process is simple, although as secure as possible, using an open protocol on the Ethereum blockchain.

Newspapers

Permanence is now a hot topic in the newspaper trade. One wrong move and years of hard work and research can go in vain. Blockchain is a smart solution to the problem.

Civil, a decentralized journalism marketplace that, in addition to obvious blockchain benefits, provides an economic incentive model for quality news content, along with the ability to permanently archive content, which will remain available. accessible at any time.

Medical applications and social life activities

Medical

When patients go to the doctor or get tested, all their results will be stored in blockchain technology. This helps patients keep all their information and test scores confidential.

In case the patient needs to be transferred to any place in the world. They just need to retrieve information and find their test results on the blockchain. Without having to go through complicated and cumbersome traditional procedures.

  • the medicalcha

MedicalChain is the first healthcare company to use blockchain technology. It facilitates the storage and use of electronic medical records to provide a complete telemedicine experience.

They are the actual doctors in the British healthcare system and want to change it from within.

  • MedRec

MedRec provides any healthcare provider with secure access to patient records.

MedRec uses blockchain to save time, money and repetitive processes in conducting procedures between different facilities and providers.

Patients can also access their medical records to research medical providers.medical

Insurrance

Blockchain in the insurance industry is often talked about, but many people do not know the technology has been implemented. For example, insurance company American International Group Inc, in partnership with International Business Machines Corp., completed a pilot of a multinational policy known as smart contracts, against Standard Chartered Bank PLCs and had complex international scope management plan through blockchain.

Health care

Medical records are notoriously rampant and rife with errors, and inconsistent data handling means that hospitals and clinics are often forced to work with inaccurate or incomplete patient records. Healthcare projects are using blockchain as a means of supporting data sharing while providing authentication and maintaining security.

Social life

LGBT community: Blockchain can be useful in building Germany's rosy economy, as well as helping the LGBT community fight for its rights without revealing everyone's identity.

The latter issue is a hugely important one because hate crimes are a recurring problem in the gay community, especially in countries notorious for human rights abuses and where homosexuality is common. banned or at least annoyed by the appearance.

Application in state management and national security

Tax

While blockchain provides us with transparency and can control our data. The technology does the same for governments. And that alludes to only one thing, tax collection.

In China, authorities are currently using a blockchain for both taxation and issuing electronic invoices.

The project was launched in 2017. The first blockchain invoice was created in August 8 at a local restaurant.tax

Vote

Due to complex security issues and electoral fraud, very few countries have switched to electronic voting machines (EVMs).

It's hard to deny that EVM makes inert voting more accessible. Therefore, promoting the participation of the people in the election. However, most countries commented that the risks outweigh the positives.

Blockchain can provide a solution to this problem. The immutability of the blockchain means problems like double voting. Changing votes and deleting votes will be "deleted" overnight.

Blockchain will also eliminate the need to count votes and produce results almost immediately after polls are over.vote

National security

In 2016, the US Department of Homeland Security (DHS) announced a project that would use blockchain as a means of securely storing and transmitting the data it acquires. Using the Factom blockchain, data retrieved from security cameras and other sensors is encrypted and stored. Use blockchain as a means of mitigating the risk of data breaches. The project is still ongoing.

Border control

Currently, passengers on the Eurostar train between the two countries undergo border control at multiple locations. Blockchain will provide a means to ensure that data has not been tampered with and is accurately verifiable.

People ID

The canton of Zug in Switzerland, known as Crypto Valley, the headquarters of a group of blockchain companies, has developed a blockchain project in partnership with Uport to register the IDs of its residents. It allows them to participate in online voting and prove their residency.

Applications in art, play and entertainment

Crafts

Similar to the diamond trade, the fine art industry depends on the provenance and authenticity of the artwork. While blockchain cannot authenticate a painting to determine if it is original or fake, it can be used to prove the previous owner of the work.

In addition, blockchain is now used as a means of obtaining artwork. It's another example of how blockchain technology can be used to make tangible objects easily tradable and exchangeable from anywhere in the world without the need for physical transfer from secure memory. whole.

Music

One of the main benefits of blockchain technology is the way it eliminates intermediaries or middlemen. Music is a prime example of an industry where inefficiencies have seen artists underpaid for their efforts. Several blockchain-based projects have emerged seeking a fairer deal for music creators.

Example: Inmusik, a music ecosystem using blockchain. Apply to listeners and musicians to monetize content creation, discovery, and updates:Blockchain application in music

Gaming

With the rise of in-game purchases and in-game payments. Many gamers now have a huge archive of things connected to their various accounts.

Obviously, this creates security issues. What if a hacker steals it? What if the parent company's server goes offline?

By implementing a blockchain, gamers will eventually be able to own these items and have complete control over their state.

Transferring in-game items to others will also become easier and safer. No one can illegally copy them.Gaming

Tourists

Blockchain is being studied as a means to improve Hawaii's economy by giving tourists the opportunity to pay for local goods and services in Bitcoin and other currencies. In this way, it is hoped to attract tourists, especially from Asia, so that they spend more money and ultimately help Hawaii grow economically.travel app blockchain

Some other blockchain applications

Protect rare animals

“Care for the Uncared” is a non-governmental organization that is working with leading developers to find ways to conserve and protect endangered species using blockchain technologies.

Smart Cities

Smart cities are no longer science fiction. Taipei is trying to position itself as a city of the future with the help of Distributed Ledger Technology. They have announced a partnership with IOTA and they are working on creating tokens with light, temperature, humidity and pollution detection.

IOTA and smart city application

Conclusion

Here is the article "What is Blockchain? Learn about the application of Blockchain technology". Hope to help you have more useful things about block chain.

If you have any questions or want to share your knowledge of blockchain technology. Then contact us in the comments below. We will reply to you as soon as possible.

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  1. The vietnamese lesson is very good and brings a lot of new knowledge to everyone. Are you able to get out and listen to this smoothly? Thank you very much.

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