The blockchain Technology

Introduction

In 2008, in the midst of the financial crisis, bitcoin appears and replaces the trust placed in banks by trust in blockchain technology. The latter has demonstrated its good functioning as a register (ledgers book) shared and transparent, tamper-proof and secure. Beyond its monetary aspect, the use of blockchain technology covers a much broader spectrum of domains: Internet of Things, Smarts Contracts, Crowdfunding, etc. If we feel that the concept of blockchain is associated with a very important innovation, it is essential to understand its operation and to show off its applications.

1. Definition

Blockchain technology is defined:

Literally: By a chain of blocks, digital containers on which are stored information of all kinds: transactions, contracts, title of property, all of these blocks form a database similar to the pages of a ledger of accounts . This book of accounts (register) is decentralized; that is, it is not hosted by a single server but by some of the users. The information contained in the blocks is protected by several innovative cryptographic methods, so that it is impossible to modify them afterwards.

Technically: By a new database technology relying on and taking full advantage of the Internet, free protocol, computing power and cryptography. This distributed transactional database is comparable to a large accounting ledger (register) in which each new transaction is written following the others, without the possibility of modifying or deleting the previous ones. This register is active, chronological, distributed, verifiable and protected against forgery by a distributed trust system (consensus) between members or participants (nodes).

2. The principle of Blockchain

The principles on which blockchain technology is based are:

• The distributed ledger or register: The blockchain takes the form of a shared register between the participants (miners). This register lists data, usually transactions between individuals. These transactions are grouped into so-called blocks that are interconnected, hence the name blockchain.
• Decentralization and disintermediation: The blockchain is based on an organization without a control body: there is no one who can modify on his own the register.
• Shared trust and transparency: We talk about transparency because this digital register is accessible to all, and that it lists each operation since the beginning of the blockchain. The identity of the users is encrypted but all transactions are accessible.
• Immutability: One of the key features of a blockchain is the fact that transactions cannot be undone or changed, once the data is written in the history, they are permanently retained.
•  Security:   Management is not provided by a single central computer, but by a large number of computers (network nodes) at the same time. Piracy or shutdown a node does not prevent the rest of the network from functioning, unlike systems that rely entirely on a central computer. Due to its diffuse management, the blockchain offers better security than a traditional system.

Thus, blockchain technology has completely changed the rules of the game: less centralization, less authority, more sharing and more security. So, the blockchain provides a robust infrastructure of distributed algorithmic trust.

3.Applications of the Blockchain

If the blockchain was, at first, only the technology that supported bitcoin, it quickly became clear that it could be used for other purposes that cryptocurrency:

The Internet of Things (IoT): The IoT is an abbreviation for the big family of connected objects. These are watches or bracelets that monitor your fitness, cars, appliances, heaters etc.

The Internet of Things allows controlling these objects remotely through an online application such as air conditioning for example. You can program remotely to gain energy consumption.

Exchanges between intelligent objects produce a large amounts of data of considerable importance, blockchain technology appears as the most suitable solution to limit the risks of hacking of these data.

Smart Contracts: This is an autonomous program once triggered, automatically executes under conditions defined beforehand and registered in the blockchain. They work like any conditional statement “if such condition is true, then such consequence runs.” the blockchain’s contribution here is to generate the confidence and security necessary to automate the declarative phases without the need of a third party.

To illustrate the use of smart contracts, let us take the example of so-called index insurance (linked to an index such as temperature or the level of rain). In this case, a smart contract between the farmer and the insurer can stipulate that a payment be made after 30 days without precipitation. A smart contract is again powered by reliable external data (rainfall data from the meteorological service) that can automatically trigger payment after 30 days of drought, without the intervention of an expert or claim of the insured.

The advantage of setting up a smart contract in a blockchain lies in the guarantee that the terms of the contract cannot be modified.

Crowdfunding : is an alternative means of project financing that involves a large number of subscribers via the Internet. Appeared in the early 1990s, it first developed in the creative industries, such as music, movies, independent literature, games, etc.

Gradually, this type of financing has been extended to social and societal projects; investors make donations through the Internet to encourage humanitarian or social initiatives. From now on, crowdfunding also concerns the projects of creation or development of companies; it interests a wider public of investors.

In the context of crowdfunding, blockchain technology can be used for: managing loans to SMEs, accelerating the issuance of mini-vouchers and reducing the cost of transactions. Tomorrow it can even be used to pay these financial securities and register them.

In this paragraph, we have cited only a few examples of uses of blockchain technology, so there is another area where this technology can be used such as: banks, payments and money transfers, cyber -security, voting, car rental or sale, authentication of diplomas, forecasts, online trading, booking, etc.

Conclusion

The great innovations are the fruit of the crossing of new technological possibilities and a favorable sociological context which transforms these technologies into uses. Thus, the blockchain was born, on the one hand, from the meeting of asymmetric cryptography and distributed systems, and, on the other hand, from a timely sociological breeding ground. The latter results from the crisis of confidence of citizens towards institutions, leading them to seek new forms of governance. Crypto-currencies, have taken advantage of the advantages of the blockchain. The latter seems likely to take an important place in several other areas such as, Internet of Things, property certificates, crowdfunding, etc. So, it’s time to get started, instead of being afraid of this extraordinary technology.