What is Blockchain Technology?

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A blockchain[1] [2] [3] originally blockchain wiki chain[4] [5] is a continuously growing list blockchain wiki recordscalled blockswhich are linked and secured using cryptography. It is blockchain wiki open, distributed ledger that can record transactions between blockchain wiki parties efficiently and in a verifiable and permanent way". Once blockchain wiki, the data in any given block cannot be altered retroactively without the alteration of blockchain wiki subsequent blocks, which requires collusion of the network majority.

Blockchains are secure by design and exemplify a distributed computing system with high Byzantine fault tolerance. Decentralized consensus has therefore been achieved with a blockchain. Blockchain was invented by Satoshi Blockchain wiki in for use in the cryptocurrency bitcoinas its public transaction ledger. The bitcoin design has been the inspiration for other applications. The first work on a cryptographically secured chain of blocks was described in by Stuart Haber and W.

The first blockchain was conceptualized by a person or group of people known as Satoshi Nakamoto in It was implemented the following blockchain wiki by Nakamoto as a core component of the cryptocurrency bitcoin, where it serves as the public ledger for all transactions on the network. The words block and chain were used separately blockchain wiki Satoshi Nakamoto's original paper, blockchain wiki were eventually popularized as a single word, blockchain, by The term blockchain 2.

Second-generation blockchain technology makes it possible to store an individual's "persistent digital Blockchain wiki and persona" and provides an avenue to help solve the problem of social inequality by "potentially changing the way wealth is distributed". Inblockchain wiki central securities depository of the Russian Federation Blockchain wiki announced a pilot project, based on the Nxt blockchain wiki 2. A blockchain is a decentralized, distributed and public digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the collusion of the network.

They are authenticated by mass collaboration powered by collective self-interests. The use of a blockchain removes the characteristic of infinite reproducibility from a digital asset. Blockchain wiki confirms that each unit of value was transferred only once, solving the long-standing problem of double spending.

Blockchains have been described as a value -exchange protocol. Blocks hold batches of valid transactions that are hashed and encoded into a Merkle tree. The linked blocks form a chain. Sometimes separate blocks can be blockchain wiki concurrently, creating a temporary fork. In addition to a secure hash-based history, any blockchain has a specified algorithm for scoring different versions of blockchain wiki history so that one with a higher value can be selected over others. Blocks not selected for inclusion in the chain are called orphan blocks.

They keep only the highest-scoring version of the database known to them. Whenever a peer receives blockchain wiki higher-scoring version usually blockchain wiki old version with a single new block added they extend or overwrite their own database and retransmit the improvement to their peers.

There is never blockchain wiki absolute guarantee that any particular entry will remain in the best version of the history forever. Because blockchains are typically built to add the score of new blocks onto old blocks and because there are incentives to work only on extending with new blocks rather than overwriting old blocks, the probability of an entry blockchain wiki superseded goes down exponentially [34] as more blocks are built on top of it, eventually becoming very low.

There are a number of methods that can be used to demonstrate a sufficient level of computation. Within a blockchain the computation is carried out redundantly rather blockchain wiki in the traditional segregated and parallel manner. The block time is the blockchain wiki time it takes for the network to generate one extra block in the blockchain. In cryptocurrency, this is practically when the money transaction takes place, so a shorter block time means faster transactions.

The block time for Ethereum is set to between 14 and 15 seconds, while for bitcoin it is 10 minutes. A hard fork is a rule blockchain wiki such that the software validating according to the old rules will see the blocks blockchain wiki according to the blockchain wiki rules as invalid. In case of a hard fork, all blockchain wiki meant to work in accordance with the new rules need to upgrade their software. If one group of nodes continues to use the old software while the other nodes blockchain wiki the new software, a split can blockchain wiki.

For example, Ethereum has hard-forked to "make whole" the investors in The DAOwhich had been hacked by exploiting a vulnerability in its code. In the Nxt community was asked to consider a hard fork that would have led to a rollback of the blockchain records to mitigate the effects of a theft of 50 million NXT from a major cryptocurrency exchange. The hard fork proposal was rejected, and some of the funds were recovered after negotiations and ransom payment.

Alternatively, to prevent a permanent split, a majority of nodes using the new software may return to the old rules, as was the case of bitcoin split on 12 March By storing data across its peer-to-peer network, the blockchain eliminates a number of risks that come with data being held centrally.

Peer-to-peer blockchain networks lack centralized points of vulnerability that computer crackers can exploit; blockchain wiki, it has no central point of failure. Blockchain security methods include the use of public-key cryptography. Value tokens sent across the network are recorded as belonging to that address.

A private key blockchain wiki like a password that gives its owner access to their digital blockchain wiki or the means to otherwise interact with the various capabilities that blockchains now blockchain wiki. Data blockchain wiki on the blockchain blockchain wiki generally considered incorruptible.

While centralized data is more easily controlled, information and data manipulation are possible. By decentralizing data on an blockchain wiki ledger, public blockchains make block-level data transparent to everyone involved. Every node in a decentralized system has a copy of the blockchain. Data quality is maintained by massive database replication [9] and computational trust. No centralized "official" copy exists and no user is blockchain wiki more than any other.

Messages are delivered on a best-effort basis. Mining nodes validate transactions, [33] add them to the block they are building, and then broadcast the completed block to other nodes. Open blockchains are more user-friendly than some traditional ownership records, which, while open to the public, still require physical access to view.

Because all early blockchains were permissionless, controversy has arisen over the blockchain definition. An issue in this ongoing debate is whether a private system with verifiers tasked and authorized permissioned by a central authority should be considered blockchain wiki blockchain. These blockchains serve as a distributed version of multiversion concurrency control MVCC in databases. The great advantage to an open, permissionless, or public, blockchain network is that guarding against bad actors is not required and no access control is needed.

Bitcoin and other cryptocurrencies currently secure blockchain wiki blockchain by requiring new entries to include a proof of work. To prolong the blockchain, bitcoin uses Hashcash puzzles. Financial companies have not prioritised decentralized blockchains. Permissioned blockchains use an access control layer to govern who has access to the network. They do not rely on anonymous nodes to validate transactions nor do they benefit from the network effect.

The New York Times noted in both and that many corporations are blockchain wiki blockchain networks "with private blockchains, independent of the public system. Nikolai Hampton pointed out in Computerworld that "There is also no need for a '51 percent' attack on a private blockchain, as the private blockchain most likely already controls percent of all block creation resources.

If you could attack or damage the blockchain creation tools on a private corporate server, you could effectively control percent of their network and alter transactions however you wished. It's unlikely that any private blockchain will try to protect records using gigawatts of computing power—it's time consuming and expensive. This means that many in-house blockchain solutions will be nothing more than cumbersome databases.

Data interchange between participants in blockchain wiki blockchain is a technical challenge that blockchain wiki inhibit blockchain's adoption and use. This has not yet become an issue because thus far participants in a blockchain have agreed either tacitly or actively on metadata standards. Standardized metadata will be the best approach for permissioned blockchains such as payments and securities trading with high transaction volumes and a limited number of participants. Such standards reduce the transaction overhead for the blockchain without imposing burdensome mapping and translation requirements on the participants.

However, Robert Blockchain wiki of Ventana Research points out that general purpose commercial blockchains require a system of self-describing data to permit automated data interchange. According to Kugel, by enabling universal data interchange, self-describing data can greatly expand the number of participants in permissioned blockchain wiki blockchains without having to concentrate control of these blockchains to a limited number of behemoths.

Self-describing data also facilitates the integration of data between disparate blockchains. Blockchain technology can be integrated into multiple areas. The primary use of blockchains today is as a distributed ledger for cryptocurrencies, most notably bitcoin.

Blockchain technology has a large potential to transform business operating models in the long term. Blockchain distributed ledger technology is blockchain wiki a foundational technology —with the potential to create new foundations for global economic and social systems—than a disruptive technologywhich typically "attack a traditional business model with a lower-cost solution and overtake incumbent firms quickly". As of [update]some observers remain skeptical. Steve Wilson, of Constellation Research, believes the technology has been hyped with unrealistic claims.

This means specific blockchain applications may be a disruptive innovation, because substantially lower-cost solutions can be instantiated, which can disrupt existing business models. Blockchains alleviate the need for a trust service provider and are predicted to blockchain wiki in less capital being tied up in disputes. Blockchains have the potential to reduce systemic risk and blockchain wiki fraud.

They automate processes that were previously time-consuming and done manually, such as the incorporation of businesses. As a distributed ledger, blockchain reduces the costs involved in verifying transactions, and by removing the need for trusted "third-parties" such as banks to complete transactions, the technology also lowers the cost of networking, blockchain wiki allowing several applications. Starting with a strong focus on financial blockchain wiki, blockchain technology is extending to activities including decentralized applications and collaborative organizations that eliminate a middleman.

Frameworks and trials such as the one at the Blockchain wiki Land Registry aim to demonstrate the effectiveness of the blockchain at speeding land sale deals. The Government of India is fighting land fraud with the help of a blockchain.

In Octoberone of the first international property transactions was blockchain wiki successfully blockchain wiki a blockchain-based smart contract. Each of the Big Four accounting firms is testing blockchain technologies in various formats.

It is important to us that everybody gets on board and prepares themselves for the revolution set to take place in the business blockchain wiki through blockchains, [to] smart contracts and digital currencies. Blockchain-based smart contracts are contracts that can be partially or fully executed or enforced blockchain wiki human interaction.

The IMF believes smart contracts based on blockchain technology could reduce moral blockchain wiki and optimize the use of contracts in general. Some blockchain wiki implementations could enable the coding of contracts that will execute when specified conditions are met. A blockchain smart contract would be enabled by extensible programming instructions that define and execute an agreement. Companies have supposedly blockchain wiki suggesting blockchain-based currency solutions in the blockchain wiki two countries:.

Some countries, especially Australia, are providing keynote participation in identifying the various technical issues associated with developing, governing and using blockchains:. Don Tapscott conducted a two-year research project exploring how blockchain technology can securely move and store host "money, titles, deeds, music, art, scientific discoveries, intellectual property, and even votes".

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Satoshi Nakamoto is the name used by the unknown person or people who developed bitcoin , authored the bitcoin white paper, and created and deployed bitcoin's original reference implementation. They were active in the development of bitcoin up until December In October , Nakamoto published a paper [6] [7] on the cryptography mailing list at metzdowd.

It was titled "Bitcoin: In January , Nakamoto released the first bitcoin software that launched the network and the first units of the bitcoin cryptocurrency , called bitcoins. Nakamoto claimed that work on the writing of the code began in The implemented solution enabled specialized codes and data fields from the start through the use of a predicative script. Nakamoto created a website with the domain name bitcoin. Around this time, he handed over control of the source code repository and network alert key to Gavin Andresen , [13] transferred several related domains to various prominent members of the bitcoin community, and stopped his involvement in the project.

Until shortly before his absence and handover, Nakamoto made all modifications to the source code himself. On 3 January , the bitcoin network came into existence with Satoshi Nakamoto mining the genesis block of bitcoin block number 0 , which had a reward of 50 bitcoins. The text refers to a headline in The Times published on 3 January This block is unlike all other blocks in that it doesn't have a previous block to reference. Timestamps for subsequent blocks indicate that Nakamoto did not try to mine all the early blocks solely for himself.

As initially the sole and subsequently the predominant miner, Nakamoto was awarded bitcoin at genesis and for 10 days afterwards. Nakamoto has not disclosed any personal information when discussing technical matters.

On his P2P Foundation profile as of , Nakamoto claimed to be a year-old male who lived in Japan , [25] but some speculated he was unlikely to be Japanese due to his use of perfect English and his bitcoin software not being documented or labelled in Japanese. Occasional British English spelling and terminology such as the phrase "bloody hard" in both source code comments and forum postings led to speculation that Nakamoto, or at least one individual in the consortium claiming to be him, was of Commonwealth origin.

Stefan Thomas, a Swiss coder and active community member, graphed the time stamps for each of Nakamoto's bitcoin forum posts more than ; the resulting chart showed a steep decline to almost no posts between the hours of 5 a. This was between 2 p. Japanese time , suggesting an unusual sleep pattern for someone presumably living in Japan. As this pattern held true even on Saturdays and Sundays, it suggested that Nakamoto was asleep at this time. This is an earlier draft than the final draft on bitcoin.

Gavin Andresen has said of Nakamoto's code: There is still doubt about the real identity of Satoshi Nakamoto. In December , a blogger named Skye Grey linked Nick Szabo to the bitcoin whitepaper using a stylometric analysis. Detailed research by financial author Dominic Frisby provides much circumstantial evidence but, as he admits, no proof that Satoshi is Szabo.

In a July email to Frisby, he said: I'm afraid you got it wrong doxing me as Satoshi, but I'm used to it'. Besides his name, Goodman pointed to a number of facts that circumstantially suggested he was the bitcoin inventor. Nakamoto was laid off twice in the early s and turned libertarian , according to his daughter, and encouraged her to start her own business "not under the government's thumb. It's been turned over to other people. They are in charge of it now. I no longer have any connection.

Hal Finney 4 May — 28 August was a pre-bitcoin cryptographic pioneer and the first person other than Nakamoto himself to use the software, file bug reports, and make improvements. However, after meeting Finney, seeing the emails between him and Nakamoto and his bitcoin wallet's history including the very first bitcoin transaction from Nakamoto to him, which he forgot to pay back and hearing his denial, Greenberg concluded that Finney was telling the truth.

On 8 December , Wired wrote that Craig Steven Wright , an Australian academic, "either invented bitcoin or is a brilliant hoaxer who very badly wants us to believe he did". The same day, Gizmodo published a story with evidence obtained by a hacker who supposedly broke into Wright's email accounts, claiming that Satoshi Nakamoto was a joint pseudonym for Craig Steven Wright and computer forensics analyst David Kleiman , who died in His business premises in Ryde, New South Wales were also searched by police.

The Australian Federal Police stated they conducted searches to assist the Australian Taxation Office and that "This matter is unrelated to recent media reporting regarding the digital currency bitcoin. In articles released on the same day, journalists from the BBC and The Economist stated that they saw Wright signing a message using the private key associated with the first bitcoin transaction.

Some people will believe, some people won't, and to tell you the truth, I don't really care. I didn't decide [to reveal my identity now]. People decided this matter for me. And they're making life difficult not for me but my friends, my family, my staff. They want to be private. They don't want all of this to affect them.

And I don't want any of them to be impacted by this. None of it's true. There are lots of stories out there that have been made up. And I don't like it hurting those people I care about. So I am going to do this thing only once.

I am going to come in front of a camera once. And I will never, ever, be on the camera ever again for any TV station, or any media, ever. Wright's claim was supported by Jon Matonis former director of the Bitcoin Foundation and bitcoin developer Gavin Andresen , both of whom met Wright and witnessed a similar signing demonstration.

However, bitcoin developer Peter Todd said that Wright's blog post, which appeared to contain cryptographic proof, actually contained nothing of the sort. On 4 May , Wright made another post on his blog intimating his intentions to publish "a series of pieces that will lay the foundations for this extraordinary claim". I believed that I could put the years of anonymity and hiding behind me.

But, as the events of this week unfolded and I prepared to publish the proof of access to the earliest keys, I broke. I do not have the courage. On Thursday 5 May shortly before closing his blog, Wright sent around an email link to a news story from an impostor site resembling SiliconAngle saying "Craig Wright faces criminal charges and serious jail time in UK".

Wright stated that "I am the source of terrorist funds as bitcoin creator or I am a fraud to the world. At least a fraud is able to see his family. There is nothing I can do. Three True Stories" in which O'Hagan spends several weeks with Wright at the request of Wright's public relations team; which, as revealed in the book, was set up as a result of a business deal between Wright and various individuals including Calvin Ayre after bitcoin was created.

All of those involved in the described business deal seemed to agree that they wanted a significant event in human history to be documented by a writer with complete impartiality and freedom to investigate. O'Hagan was with Wright during the time of his various media interviews. O'Hagan also interviews Wright's wife, colleagues and many of the other people involved in his claims.

Further, O'Hagan suggests that Wright provided an invalid private key because he was legally unable to provide the valid one as a result of legal obligations agreed as part of a Seychelles trust deal previously reached. O'Hagan's book also corroborates the suggestion that both Wright and David Kleiman were the identies of the moniker "Satoshi Nakamoto". He had told the BBC that he had not wanted to come out into the spotlight but needed to dispel damaging rumours affecting his family, friends and colleagues.

But O'Hagan shows us something rather different - a man under intense pressure from business associates who stood to profit from him if he could be shown to be Nakamoto. This is in reference to O'Hagan's firsthand account, which describes business associates as being furious when they learned that Wright had provided invalid proof despite showing them valid proof privately and for his failure to disclose the details of the Seychelles Trust deal which meant that he could neither provide said proof publicly or yet gain access to the bitcoin attributed to Nakamoto.

Cellan-Jones concludes his article by expressing doubts about Wright but admits "It seems very likely he was involved, perhaps as part of a team that included Dave Kleiman and Hal Finney, the recipient of the first transaction with the currency.

Ian Grigg, who is credited with inventing triple entry accounting [84] describes the events as follows [85]:. Firstly, Satoshi Nakamoto is not one human being. It is or was a team. Craig Wright named one person in his recent communications, being the late Dave Kleinman. Craig did not name others, nor should I. While he was the quintessential genius who had the original idea for Bitcoin and wrote the lion's share of the code, Craig could not have done it alone. Satoshi Nakamoto was a team effort.

New Liberty Dollar issuer Joseph VaughnPerling says he met Wright at a conference in Amsterdam three years before publication of the bitcoin white paper and that Wright introduced himself as Satoshi Nakamoto at that time. In a article in The New Yorker , Joshua Davis claimed to have narrowed down the identity of Nakamoto to a number of possible individuals, including the Finnish economic sociologist Dr.

Vili Lehdonvirta and Irish student Michael Clear, [88] then a graduate student in cryptography at Trinity College Dublin and now a post-doctoral student at Georgetown University. All three men denied being Nakamoto when contacted by Penenberg. The late Dave Kleiman has been also named as a possible candidate, and Craig Wright claimed an association with him as well. Trammell, a Texas-based security researcher, was suggested as Nakamoto, but he publicly denied it. The two based their suspicion on an analysis of the network of bitcoin transactions, [99] but later retracted their claim.

Some have considered that Nakamoto might be a team of people: Dan Kaminsky , a security researcher who read the bitcoin code, [] said that Nakamoto could either be a "team of people" or a "genius"; [26] Laszlo Hanyecz, a former Bitcoin Core developer who had emailed Nakamoto, had the feeling the code was too well designed for one person. A article [] published by a former SpaceX intern espoused the possibility of SpaceX and Tesla CEO Elon Musk being the real Satoshi, based on Musk's technical expertise with financial software and history of publishing whitepapers.

However, in a tweet on November 28th, Musk denied the claim. From Wikipedia, the free encyclopedia. Archived from the original on 21 August Retrieved 3 November The great chain of being sure about things". Archived from the original on 3 July Retrieved 18 June Archived from the original on 11 August