Understanding What Blockchain Technology Is, Its Importance And Structure

During the last two years, cryptocurrencies have grown to become quite a large and well-known trend. They rose from being an unknown, background technology to the most talked-about aspect of both, tech and financial world. However, it is not enough to simply know that they exist and how they can be traded.

To truly understand cryptocurrencies and be able to make proper investment options, we need to go deeper and understand the technology that allowed them to exist in the first place. This is, of course, blockchain technology.

The Importance Of blockchain technology

The first thing to understand about blockchain is that this technology holds much more potential than simply being a building block for the crypto industry. While this was its original purpose 10 years ago, it has grown to become a lot more than that in recent years.

It now has numerous real-life use cases, it allows the creation of new projects, and it is likely the technology that will define our lives in the future. This is due to the fact that blockchain serves as a type of database. However, it is different than regular databases due to several factors.

For example, it is decentralized, which means that it has no central authority. It also allows users to claim ownership of the data they record on the blockchain. Not only that, but it is also consistent, which means that data that is being recorded cannot be in conflict with the data that is already there. This prevents data manipulation, deleting information, and alike, which makes blockchain perfect for storing data such as identification documents, and other important info.

At this point, it becomes obvious that supporting cryptocurrencies is not all that blockchain has to offer. Instead, Bitcoin and its altcoins are only the first of near-infinite amount of use cases that blockchain has to offer.

Some countries that did not share the initial (and in some cases: current) skepticism toward cryptocurrencies started researching blockchains a long time ago. This has allowed them to already gain some valuable insight into this technology, and start using it for storing medical records, making plans to use it for voting, and even make property agreements that would be recorded on top of it.

In a way, blockchain’s ultimate purpose is to allow different parties to trust one another, as data stored on the blockchain can easily be considered as something set in stone.

What Does The Blockchain Consist Of?

One thing to understand is that blockchain is quite complex technology. It is not a coincidence that it has been studied for years, and yet researchers claim that they have barely scratched the surface of this tech’s true potential. As such, it consists of numerous components. These include:

Ledger

A historical record which is immutable and distributed, and it is supposed to allow blockchain to record everything that is happening in a chronological order.

Peer Network

This component allows blockchain to store, update, and maintain its ledger. Every node that the network consists of contains its own copy of the ledger, and the network’s job is to come to a consensus before any changes to the ledger are changed. That way, each copy of the ledger will remain identical.

Membership Services

All members of the public blockchain have equal power, rights, and authority. Anyone can join at any time and become a recognized participant of the network. Private, or permissioned ledgers require new users to be authorized to join, and this is mostly reserved for businesses that use blockchain for private communication.

Smart Contracts

Smart contracts are a type of program that is run on top of the blockchain. They are the aspect that allowed blockchain to step away for being simply a foundation for using cryptocurrencies.

Wallets

Wallets are pieces of software that can store users’ credentials and allow them to track and manage digital assets.

Events

This includes notifications of various updates and other actions that are performed on the blockchain. Everything that happens is updated by events. Some examples include making new transactions, adding new blocks to the chain, or providing notifications from smart contracts.

System Management

This aspect includes things like monitoring, modifying, and creating new components. Due to its very design, blockchain is expected to be a lasting system. However, there is still room for it to evolve and change according to need.

System Integration

This is an aspect of blockchain that allows it to integrate with external systems. It was deemed necessary as blockchain evolved, and its functionality grew. In most cases, integration with external systems is done via smart contracts, but system integration remains an acknowledged capability of blockchain technology.

Data Structure

Blockchain data is composed of two largest dimensions that are usually associated with performance and scalability. Those are Data Storage and Data Processing.

Data storage can be understood by remembering how traditional databases work. Blockchains provide immutable, distributed storage that comes with integrity checking already built into it. However, it still has a maximum capacity for each block, which depends on its size and rate. For efficiency purposes, it is not uncommon to store the actual data off-chain, while the data’s hash is the only information that is actually stored on the chain itself. That way, data is still protected, while the blockchain doesn’t get over-encumbered.

As for Data Processing, this is often represented by some type of an external system that does the additional processing. Smart contracts that are executed on the blockchain are usually processes that demand the most processing power. For this reason, external devices are used for providing this power and fueling the execution of various contracts.

Blockchain Hierarchy

While blockchain is decentralized and there is no single authority that is “in control”, there are still different types of actors, or agents, that have their own functions on the chain. Some of them work on development, others are in charge of implementation, but they all work as parts of a greater system that is blockchain.

– The Architect is the person (or group) that is responsible for designing the structure of the blockchain.

– Operator, or administrator, stores, maintains and updates the ledger.

– Developers are in charge of creating smart contracts. They design them and upload them, and by doing that, they expand its capabilities.

– Trustees, or regulators, are people that have greater visibility into the ledger. They are an essential part of the ecosystem since many blockchain-based businesses have to operate under different regulations regarding how their data is stored and processed.

– Users are the last type of agents on the blockchain, and they represent consumers of its services. Usually, this involves using the software that was created on the blockchain, and not interacting with the blockchain itself.

Blockchain As A Triple-Entry Bookkeeping System

One of the main reasons why blockchain can revolutionize nearly every industry in the near future is its ability to serve as a triple-entry bookkeeping system that can work on a global scale.

It is an improvement to the double-entry systems, and all accounting-related entries that involved outside parties were sealed cryptographically by a third entry. Sellers can book a debit to account for the cash that they have received, and buyers can do the same for the cash that they spent during the same transaction. However, all of this is being stored in separate sets of records.

Blockchain has the ability to make these entries occur in the same ledger, instead of them occurring separately in different sets of books. On the blockchain, it all comes down to making such transaction occur in form of transfer between different wallet addresses. The entries remain distributed, as well as cryptographically sealed, which makes it impossible to destroy them or falsify them.

Five features of the triple-entry accounting include:

  • Tamper-proof records
  • Double-entry + cryptography
  • Distributed ledgers
  • Digitally signed receipts
  • Validation, security, and privacy

While the blockchain technology is still very far from reaching the full extent of its capabilities, it has already changed the world by offering a new way of conducting businesses. Researchers around the world are working on this technology at all times, trying to make it more efficient, simpler to use, and better in terms of security and transparency.

New organizations and businesses dedicated to blockchain are also appearing all the time, and the blockchain development is progressing faster than ever, while at the same time, it promises to change the world.

Be the first to comment

Leave a Reply

Your email address will not be published.


*


Privacy Policy

WideBitcoin.com is committed to safeguarding your privacy. Contact us at if you have any questions or problems regarding the use of your Personal Data and we will gladly assist you.

By using this site or/and our services, you consent to the Processing of your Personal Data as described in this Privacy Policy.

Table of Contents

  1. Definitions used in this Policy
  2. Data protection principles we follow
  3. What rights do you have regarding your Personal Data
  4. What Personal Data we gather about you
  5. How we use your Personal Data
  6. Who else has access to your Personal Data
  7. How we secure your data
  8. Information about cookies
  9. Contact information

Definitions

Personal Data – any information relating to an identified or identifiable natural person.
Processing – any operation or set of operations which is performed on Personal Data or on sets of Personal Data.
Data subject – a natural person whose Personal Data is being Processed.
Child – a natural person under 16 years of age.
We/us (either capitalized or not)

Data Protection Principles

We promise to follow the following data protection principles:

  • Processing is lawful, fair, transparent. Our Processing activities have lawful grounds. We always consider your rights before Processing Personal Data. We will provide you information regarding Processing upon request.
  • Processing is limited to the purpose. Our Processing activities fit the purpose for which Personal Data was gathered.
  • Processing is done with minimal data. We only gather and Process the minimal amount of Personal Data required for any purpose.
  • Processing is limited with a time period. We will not store your personal data for longer than needed.
  • We will do our best to ensure the accuracy of data.
  • We will do our best to ensure the integrity and confidentiality of data.

Data Subject’s rights

The Data Subject has the following rights:

  1. Right to information – meaning you have to right to know whether your Personal Data is being processed; what data is gathered, from where it is obtained and why and by whom it is processed.
  2. Right to access – meaning you have the right to access the data collected from/about you. This includes your right to request and obtain a copy of your Personal Data gathered.
  3. Right to rectification – meaning you have the right to request rectification or erasure of your Personal Data that is inaccurate or incomplete.
  4. Right to erasure – meaning in certain circumstances you can request for your Personal Data to be erased from our records.
  5. Right to restrict processing – meaning where certain conditions apply, you have the right to restrict the Processing of your Personal Data.
  6. Right to object to processing – meaning in certain cases you have the right to object to Processing of your Personal Data, for example in the case of direct marketing.
  7. Right to object to automated Processing – meaning you have the right to object to automated Processing, including profiling; and not to be subject to a decision based solely on automated Processing. This right you can exercise whenever there is an outcome of the profiling that produces legal effects concerning or significantly affecting you.
  8. Right to data portability – you have the right to obtain your Personal Data in a machine-readable format or if it is feasible, as a direct transfer from one Processor to another.
  9. Right to lodge a complaint – in the event that we refuse your request under the Rights of Access, we will provide you with a reason as to why. If you are not satisfied with the way your request has been handled please contact us.
  10. Right for the help of supervisory authority – meaning you have the right for the help of a supervisory authority and the right for other legal remedies such as claiming damages.
  11. Right to withdraw consent – you have the right withdraw any given consent for Processing of your Personal Data.

Data we gather

Information you have provided us with
This might be your e-mail address, name, billing address, home address etc – mainly information that is necessary for delivering you a product/service or to enhance your customer experience with us. We save the information you provide us with in order for you to comment or perform other activities on the website. This information includes, for example, your name and e-mail address.

Information automatically collected about you
This includes information that is automatically stored by cookies and other session tools. For example, your shopping cart information, your IP address, your shopping history (if there is any) etc. This information is used to improve your customer experience. When you use our services or look at the contents of our website, your activities may be logged.

Information from our partners
We gather information from our trusted partners with confirmation that they have legal grounds to share that information with us. This is either information you have provided them directly with or that they have gathered about you on other legal grounds. See the list of our partners here.

Publicly available information
We might gather information about you that is publicly available.

How we use your Personal Data

We use your Personal Data in order to:

  • provide our service to you. This includes for example registering your account; providing you with other products and services that you have requested; providing you with promotional items at your request and communicating with you in relation to those products and services; communicating and interacting with you; and notifying you of changes to any services.
  • enhance your customer experience;
  • fulfil an obligation under law or contract;

We use your Personal Data on legitimate grounds and/or with your Consent.

On the grounds of entering into a contract or fulfilling contractual obligations, we Process your Personal Data for the following purposes:

  • to identify you;
  • to provide you a service or to send/offer you a product;
  • to communicate either for sales or invoicing;

On the ground of legitimate interest, we Process your Personal Data for the following purposes:

  • to send you personalized offers* (from us and/or our carefully selected partners);
  • to administer and analyse our client base (purchasing behaviour and history) in order to improve the quality, variety, and availability of products/ services offered/provided;
  • to conduct questionnaires concerning client satisfaction;

As long as you have not informed us otherwise, we consider offering you products/services that are similar or same to your purchasing history/browsing behaviour to be our legitimate interest.

With your consent we Process your Personal Data for the following purposes:

  • to send you newsletters and campaign offers (from us and/or our carefully selected partners);
  • for other purposes we have asked your consent for;

We Process your Personal Data in order to fulfil obligation rising from law and/or use your Personal Data for options provided by law. We reserve the right to anonymise Personal Data gathered and to use any such data. We will use data outside the scope of this Policy only when it is anonymised. We save your billing information and other information gathered about you for as long as needed for accounting purposes or other obligations deriving from law, but not longer than 1 year.

We might process your Personal Data for additional purposes that are not mentioned here, but are compatible with the original purpose for which the data was gathered. To do this, we will ensure that:

  • the link between purposes, context and nature of Personal Data is suitable for further Processing;
  • the further Processing would not harm your interests and
  • there would be appropriate safeguard for Processing.

We will inform you of any further Processing and purposes.

Who else can access your Personal Data

We do not share your Personal Data with strangers. Personal Data about you is in some cases provided to our trusted partners in order to either make providing the service to you possible or to enhance your customer experience. We share your data with:

Our processing partners:

  • facebook.com
  • google.com
  • bing.com
  • twitter.com
  • pinterest.com

Our business partners:

  • facebook.com
  • google.com
  • bing.com
  • twitter.com
  • pinterest.com

Connected third parties:

  • facebook.com
  • google.com
  • bing.com
  • twitter.com
  • pinterest.com

We only work with Processing partners who are able to ensure adequate level of protection to your Personal Data. We disclose your Personal Data to third parties or public officials when we are legally obliged to do so. We might disclose your Personal Data to third parties if you have consented to it or if there are other legal grounds for it.

How we secure your data

We do our best to keep your Personal Data safe. We use safe protocols for communication and transferring data (such as HTTPS). We use anonymising and pseudonymising where suitable. We monitor our systems for possible vulnerabilities and attacks.

Even though we try our best we can not guarantee the security of information. However, we promise to notify suitable authorities of data breaches. We will also notify you if there is a threat to your rights or interests. We will do everything we reasonably can to prevent security breaches and to assist authorities should any breaches occur.

If you have an account with us, note that you have to keep your username and password secret.

Children

We do not intend to collect or knowingly collect information from children. We do not target children with our services.

Cookies and other technologies we use

We use cookies and/or similar technologies to analyse customer behaviour, administer the website, track users’ movements, and to collect information about users. This is done in order to personalize and enhance your experience with us.

A cookie is a tiny text file stored on your computer. Cookies store information that is used to help make sites work. Only we can access the cookies created by our website. You can control your cookies at the browser level. Choosing to disable cookies may hinder your use of certain functions.

We use cookies for the following purposes:

  • Necessary cookies – these cookies are required for you to be able to use some important features on our website, such as logging in. These cookies don’t collect any personal information.
  • Functionality cookies – these cookies provide functionality that makes using our service more convenient and makes providing more personalised features possible. For example, they might remember your name and e-mail in comment forms so you don’t have to re-enter this information next time when commenting.
  • Analytics cookies – these cookies are used to track the use and performance of our website and services
  • Advertising cookies – these cookies are used to deliver advertisements that are relevant to you and to your interests. In addition, they are used to limit the number of times you see an advertisement. They are usually placed to the website by advertising networks with the website operator’s permission. These cookies remember that you have visited a website and this information is shared with other organisations such as advertisers. Often targeting or advertising cookies will be linked to site functionality provided by the other organisation.

You can remove cookies stored in your computer via your browser settings. Alternatively, you can control some 3rd party cookies by using a privacy enhancement platform such as optout.aboutads.info or youronlinechoices.com. For more information about cookies, visit allaboutcookies.org.

We use Google Analytics to measure traffic on our website. Google has their own Privacy Policy which you can review here. If you’d like to opt out of tracking by Google Analytics, visit the Google Analytics opt-out page.

Read more about cookies on our Cookie Policy

Contact Information

email: [email protected]

Changes to this Privacy Policy

We reserve the right to make change to this Privacy Policy.

You can configure your Internet browser, by changing its options, to stop accepting cookies completely or to prompt you before accepting a cookie from the website you visit. If you do not accept cookies, however, you may not be able to use all portions of the WideBitcoin Websites or all functionality of the Services.

Please note that disabling these technologies may interfere with the performance and features of the Services.

You may also disable cookies on the WideBitcoin Sites by modifying your settings here:

Visitor comments may be checked through an automated spam detection service.

Last Update: May 25, 2018