Beyond the sea of information

We have lived in the sea of information since Internet has appeared in the world and has come across various new technologies such as e-mail, social media, big data, and the Internet of things. The Internet has brought a positive change in the world as a whole, but it also has serious limitations. It infringes on privacy as much as it brings abundance. Online communications and transactions have increased, but cybercrime has also increased. Developers were struggling with security, privacy breaches, and so on. Protocols have been developed and many improvements have been made, but the infrastructure of the Internet is vulnerable to security, so we could not rule out the existence of third parties. People had to trust a third party as much as they did in a money transaction.

Then, in 2008, the global financial industry collapsed, and anonymously someone (or several) named Satoshi Nakamoto conceived a new protocol. By using a bitcoin, a cryptocurrency, it is possible to establish rules by distributed calculation, and to ensure the authenticity by exchanging data through a large number of devices without third party verification. The emergence of this new technology has created a stir in the world. The establishment of vested interests boasted and despised, but political idealists saw freedom and revolution in this technology, and computer engineers hung on the great potential of this technology.

“Bitcoin is just one example of something that uses a blockchain. Cryptocurrencies are just one example of decentralized technologies. And now that the Internet is big enough and diverse enough, I think we will see different flavors of decentralized technologies and blockchains. I think decentralized networks will be the next huge wave in technology. The blockchain allows our smart devices to speak to each other better and faster.”
Melanie Swan, author of Blockchain: Blueprint for a New Economy

What is blockchain?

It is a distributed data storage technology that transparently records transactions on a ledger that anyone can read, and replicates them to multiple computers and stores them. Several computers verify the record to prevent hacking.

Bitcoin was developed using a distributed data storage technique called a blockchain. It is a method of storing data in a block and connecting it in a chain form to replicate it to many computers around the world simultaneously. Data is not stored in a file somewhere, so it does not need to be kept on a centralized server, and there is no database exposed to hacking. It is always on the network so anyone can see the history. Every time a transaction occurs in a blockchain, all trading partners share and collate information, making it impossible to forge or tamper with the data. You do not have to worry about security vendors being vulnerable to fraudulent firewalls or financial institutions.

Let's compare the transaction between the existing bank and bitcoin.

In order to transfer money to a person named A, he had to pay a fee to the intermediary supervisory bank and get certified.

However, when sending a bitcoin, people who access the Internet will authenticate the transaction and share the transaction ledger without a separate certification authority. If you do not need to pay a bank fee and only have an Internet connection, you can transfer money from anywhere in the world. This is made possible through blockchain technology that works in P2P mode.

But the blockchain is not all perfect. There is anxiety that network participants can trust each other. If someone tries to manipulate a block of a chain, you can manipulate it if you invest more than half of the network's computational resources. Fortunately, however, this concern disappears with regard to bitcoin. In order to steal the bitcoin it is virtually impossible to rewrite the history of all the blocks in the blockchain. Concerns have emerged that the development of quantum computers with innovative computational capabilities and computational speeds can threaten blockchain technology, but it is generally accepted by academia that there is no credibility. (It is still under debate among experts, as to whether the speed of development of the blockchain technology can be overtaken by a quantum computer to break Bitcoin's security system.) Theoretically it is possible, but it is practically impossible.

What are the application areas of the blockchain?

You cannot think of a blockchain as limited to a bitcoin. There are many pieces of information that can be stored in a blockchain, so the area in which this technology can be used is also very broad. All transaction activity will be recorded in a publicly distributed ledger that can be seen by anyone accessing the Internet, thereby reducing financial fraud. Because it can not be falsified, it can be used to track the distribution process or to authenticate the artwork. You will be able to have your will or contract executed on your own, and you will not have to manipulate the patent date. It can also be used to manage medical records shared between hospitals.

In fact, Estonia currently operates an e-government system based on blockchain. When the patient visits the hospital, the information recorded in the digital ID and the patient's medical history are transmitted to the doctor. It is very useful when it is difficult to communicate like an older person or unconscious patient. In case of an emergency, the ambulance will send the records to the hospital in advance so that quick treatment can be done. Thus, the blockchain can be used in various fields requiring reliability.

Conclusion

Like the dot-com boom in the 1990s, the investment in blockchain start-ups is increasing. Investing in cryptocurrency is so overheated that speculators and criminals are jumping. There are side effects such as ponzi scheme, but it should be spread well. Obviously, with the advent of blockchain, those who provide trust services, such as banks and notaries, have come up with a huge challenge to their survival. This is because bitcoin networks that use blockchain technology can bypass traditional financial sanctions. These new networks can evolve to create a safer and more reliable society. Many countries seem to have a lukewarm attitude in adopting the blockchain technology. But the development of technology is an irreversible flow. How will the government, the finance, and the lawmaking agency accept the block chain in the future? And what will happen to our lives?