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MT Wallet

What is Blockchain?

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MT Wallet

We have some really smart people here and some of them are computer guys too. I've hear people on TV talking about something called "Blockchain". It seems to be the new golly gee whiz term folks are tacking onto everything. "Blockchain technology". Some people have mentioned it in terms of being some end all be all inventory tracking control system. Now, it seems Facebook is buying a company with Blockchain incryption. Can you great folks tell me what this really is?

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Bud

block·chain

ˈbläkËŒCHÄn/Submit

noun

noun: blockchain; plural noun: blockchains; noun: block-chain; plural noun: block-chains

a digital ledger in which transactions made in bitcoin or another cryptocurrency are recorded chronologically and publicly.

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Sonor

In my opinion, it is going to be a "game changer" for IT. In the last year (or so) over 2500 patents have been issued for variants or modules to Blockchain everything from Healthcare to Banking. Imagine a string of computer servers all linked together basically running the same database. Should one have a change, the others validate that the change was authentic and allow the change to be replicated, if not authentic then it is not allowed. All of this is then recorded chronologically and track-able (in the newest versions). This is a simplistic view, but if it is put into use by such systems as lets say the IRS just for managing people, there is one record of you rather than thousands. That one record of you, if tampered with is tracked and corrected by the rest of the system. Until recently it was thought that this was "hack proof" but someone figured out how to break in. Of course, that means thousands of others are figuring out to stop that and other possibilities.

 

 

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John Ranalletta

Think of blockchain in this way. Today, if I buy an item from you, I will send a check, use Paypal or meet you in person to give you cash. The first two mean using a 3rd party who takes a cut or makes a profit on the deal and the 3rd requires travel and effort.

 

With block chain tech, you and I would belong to an exchange where we both have a cryptocurrency "wallet". I would send bitcoin or etherium directly from my account to yours. Your "ledger" increments while mine decreases by the amount sent, but you and I are not connected; so, "Miners", people with high-powered computing systems, continually process millions of transactions like yours and mine to balance the accounts.

 

The mining process seems to be the Achilles heel of the system as mining farms use incredible amounts of energy.

 

That's as much as I know about it, except the potential to make any and all transactions without third party intermediaries, other than miners and exchanges that hold the wallets. In the exchange, you can turn your coin into regular currency.

 

Amazon is supposedly developing its own cryptocurrency; so, imagine a time when you would have an amount of "Amacoin" in your account. You could buy a product on Amazon, sending your Amacoin to the seller w/o Paypal or credit card and the transaction would be virtually instantaneous, except for delivery time.

Edited by John Ranalletta

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poodad

Blockchain is a ledger of electronically signed transactions that is distributed to all interested parties.

 

To understand blockchain, you have to understand public/private key encryption. This is where a pair of encryption keys are used when encrypting and decrypting data. Data encrypted by one key can only be decrypted by the other key. One of these keys becomes an entity's "private" key, and as the name implies, is kept private. The other key is a "public " key, and is distributed publicly.

 

This allows two handy functions:

 

1. I can encrypt data using your public key, and only you can decrypt it with your private key. This has the benefit of allowing only you to read the data without having to pre-share some sort of secret key.

2. More importantly to this discussion, I can encrypt data using my private key and everyone else can decrypt that data using my public key. SInce my public key will only decrypt data encrypted by my private key, and only I know my private key, everyone can be assured the data came from me. This is called a cryptographic signature.

 

Whenever a transaction is made by two parties, the details of the transaction are encrypted using their private keys, and appended to the end of the blockchain. Since the parties' public keys are well known, any recipient of the blockchain can verify transactions in the blockchain by decrypting using the parties' public keys. If the decryption is successful, they know the transaction is legitimate.

 

The real magic is keeping the blockchain synced across hundreds, thousand, millions, or even billions of interested parties.

 

 

 

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chrisolson
Blockchain is a ledger of electronically signed transactions that is distributed to all interested parties.

...

The real magic is keeping the blockchain synced across hundreds, thousand, millions, or even billions of interested parties.

The big draw of blockchain for financial transactions is the lack of government oversight and tracking via the current banking system. But its that synchronization that seems to me to be a huge issue. No electronic network is up 100 percent of the time across the US let alone across the world.

 

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Joe Frickin' Friday
Think of blockchain in this way. Today, if I buy an item from you, I will send a check, use Paypal or meet you in person to give you cash. The first two mean using a 3rd party who takes a cut or makes a profit on the deal and the 3rd requires travel and effort.

 

With block chain tech, you and I would belong to an exchange where we both have a cryptocurrency "wallet". I would send bitcoin or etherium directly from my account to yours. Your "ledger" increments while mine decreases by the amount sent, but you and I are not connected; so, "Miners", people with high-powered computing systems, continually process millions of transactions like yours and mine to balance the accounts.

 

Blockchain is most commonly associated with currency transfers, but people are looking to apply it to other situations where robust recordkeeping is desirable. One of these is land ownership.

 

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John Ranalletta

Bitcoin explained

 

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MT Wallet

I just saw a new IBM ad touting Blockchain as a tracking method for Kenyan coffee. The ad starts by saying the cup of coffee pictured was special then shows it being harvested at 6,000 ft. above sea level in Kenya. The script then says at every stage of it's journey to become the coffee in the cup in the ad Blockchain guarantees that the coffee bean came from 6,000 feet above sea level and not one foot lower!! Wow. Where's the cryptocurrency application in this scenario? Still looking for the rest of the story. It looks like Z-man is closest to the use for inventory control issue I heard in a TV discussion.

Edited by MT Wallet

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poodad
I just saw a new IBM ad touting Blockchain as a tracking method for Kenyan coffee. The ad starts by saying the cup of coffee pictured was special then shows it being harvested at 6,000 ft. above sea level in Kenya. The script then says at every stage of it's journey to become the coffee in the cup in the ad Blockchain guarantees that the coffee bean came from 6,000 feet above sea level and not one foot lower!! Wow. Where's the cryptocurrency application in this scenario? Still looking for the rest of the story. It looks like Z-man is closest to the use for inventory control issue I heard in a TV discussion.

 

Cryptocurrency and blockchain are two different things. Cryptocurrency uses blockchain to record when cryptocurrency changes hands, but blockchain can be used to record any sort of transaction in a manner that is non-centralized and secure.

 

The coffee use case is a good example. Every time a batch of coffee beans changes hands, the buyer and seller use their private keys to encrypt (sign) the transaction, then append the signed transaction to to coffee blockchain. Any potential customer can then search the blockchain for transactions related to that batch of coffee, and by decrypting every transaction with the transaction's parties' public keys, can verify that the transaction was indeed legitimate.

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MT Wallet

I think that was/is the differentiation I was trying to get my arms around. As I started out saying it was being portrayed as an inventory system by some commentators and then an encryption method which interested Facebook. Explaining it in the context as an encrypted system that can do just about anything makes sense. It's like a spread sheet in the instance of cryptocurrency transactions.Yes?

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poodad
I think that was/is the differentiation I was trying to get my arms around. As I started out saying it was being portrayed as an inventory system by some commentators and then an encryption method which interested Facebook. Explaining it in the context as an encrypted system that can do just about anything makes sense. It's like a spread sheet in the instance of cryptocurrency transactions.Yes?

 

That's actually a pretty good analogy. Blockchain is a spreadsheet where anyone and everyone can look at it or append rows (no central control), and where everyone can independently verify the validity of every row.

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JohnnyJ

I recently saw a television show where it explained that Blockchain is a popular method of payment in the high end Art world because the process also provides good provenance for authenticity in future sales.

 

Johnny J

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AviP

Here's an example where it might be useful. Let's say you are the 4th buyer of a 2005 R1200RT but you just know the 3rd buyer from whom you bought it. The 3rd buyer knows the 2nd buyer but doesn't share that info with the 4th buyer so the provenance of this bike is lost and buried somewhere in the anals of the DMV. With blockchain, the entire history of that RT can be maintained without the loss of information that occurs. The concept can be extended to maintenance records and would render CarFax obsolete. DIYers would be screwed. But you get the point!

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chrisolson

The link below is the best discussion I've seen of what a "blockchain" is ... or is not ... or who knows what ! Its a long read but after much personal research, this article puts many of the pieces together. One thing to remember is blockchain is a concept not an application. So each design is unique to its solution. Another key fact is that erroneous data ( like a "fat finger" mistake ) can still be validated as a transaction so the thought that any particular blockchain represents the absolute truth is false.

 

LINKY

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