Among the latest waves of digitization, according to the UN website, is blockchain, a technology that many say promises to redefine trust, transparency and inclusion around the world.
According to the same source, there is a lot of noise about the blockchain technology as well as the misconception about it, due to the fact that it is very new and partly due to greed, as people realize that they can make money from the blockchain technology As a new form of asset class.
Contrary to what people often talk about, that cryptocurrencies are “free from government control” or outside the market and the current political system, blockchain technology does not exist in a vacuum, and it works within the political economy like all other technologies.
What is the Blockchain? And what can it give us? How does it work? And what are its types? And what are its advantages and disadvantages?
According to Al Jazeera Net, “Blockchain” is defined as a distributed database shared between computer network devices, where each device is called a “node” and information is stored distributed on more than one “node”. At the same time.
The “blockchain” appeared in 1991 with the aim of preventing the manipulation of time stamps, and in 1998 it was used for the first time in the digital payment system, and the first digital currency associated with the “blockchain” appeared in 2009 appears as the beginning of the impact of this technology on all technological fields.
The “blockchain” is also known as the “distributed ledger” technology, whereby digital trade data is stored in this record according to its chronological order, with no possibility of manipulation or deletion by any party.
Perhaps one of the reasons blockchain technology has attracted so much attention, according to the United Nations website, is that it speaks to a feeling instinctively shared by many people around the world, that we can only create new solutions to some of the oldest problems in the world by working together and including everyone in the discussion.
According to the same source, the blockchain technology appears to many people as a viable solution precisely because it is about applying an opposite approach to reduce problems; Although the deterministic method of the technique is often discussed.
How does “blockchain” work?
The “blockchain” works by integrating the roles of 3 elements which are the encrypted keys, the “peer-to-peer” (P2P) network and the digital ledger.
To explain how these elements work, we need to know that each “node” contains two encrypted keys, one public and the other private, and through these two keys each node has its own digital signature.
All the performed transfers are digitally signed by authenticating them over the peer-to-peer network by various “nodes”, and after this process is validated, they are stored in the “digital register”.
The “digital record” keeps the history of all transfers and allows everyone to see it. What is different here is that the record does not give the ability to modify or destroy the stored information for any party who views it.
In other words, the “digital record” is all the “nodes” connected to each other by the network, in which the information of transactions that take place between individuals is stored and kept safe.
Types of “Blockchains”“
1 Public “blockchain” networks:
These are the networks from which the various digital currencies originated, and which played an important role in the spread of the “distributed digital ledger” technology. These networks also help to solve specific problems such as security and centralization defects, and with the presence of the “digital record” data is distributed over a “peer-to-peer” network instead of stored in one place, a collective algorithm is used to verify the origin of the information.
2 Private “blockchain” networks:
This type of blockchain works on closed networks and works well to serve businesses and private organizations, and companies can use this private “blockchain” to change information access procedures, better authentication methods for information, network parameters, as well as some important security. options.
3 “Blockchain” networks with permissions:
Also known as hybrid “blockchain”, these are “blockchain” networks that allow privileged access to some authorized individuals. This type of network combines the advantages of the public and private types and provides a better structure when determining who can participate in the network and in which transfers.
3 « Federal block chains :
Somewhat similar to permissioned “blockchains” that contain components of both public and private networks, except that they can be managed by multiple entities or institutions through a single federated network.
Despite the complexity of establishing these networks, it offers better security in addition to the fact that federated “blockchains” are optimal for the cooperation of several institutions.
Decentralization is the title
The “blockchain” is characterized by the “decentralization” feature, that is, the information is not stored in one place, making it vulnerable to loss due to penetration or otherwise, but is instead distributed to more than one device or “node ” spread. ” connected to the computer network to ensure that transfers are not affected if someone experiences a problem. Hardware problem.
The information received is matched by various “contracts” to ensure the validity of the transfers as well as their accuracy, and thus the “block chain” ensures the security and integrity of the transfers that take place through it and allows the storage of all others then. types of sensitive information.
Some uses of “blockchain” «
1 Transactions and money transfers
The most common use of the “blockchain” is trade and financial transfers, and this use has spread widely due to the ease and guarantee provided by the nature of the “blockchain” in financial transactions. The first digital currency related to the “blockchain” appeared in 2009, which is “Bitcoin”. (Bitcoin).
Then followed by the emergence of several similar projects, the most famous of which is Ethereum. The famous “IBM” company also developed a banking platform based on “blockchain” and several large banks contracted with it, so the use of “block chain” was not only limited to digital currencies, but expanded to include traditional currencies in to close also.
The use of “blockchain” has extended to the field of travel in several important aspects, the first of which is the tracking of luggage, during successive trips to the same destination, to ensure that luggage does not get lost or confused, and “blockchain” is used to identify passengers traveling to save time and human effort in that process.
3 digital security
Major companies in the field of digital security are using “blockchain” technology to improve the results of their efforts in this area, as this technology makes it possible to keep sensitive and important information safe without fear of losing it or being sabotaged , by taking advantage of the security and reliability benefits inherent in “blockchain” technology. It is also possible to refrain from using passwords, especially weak and commonly used passwords, to protect users from being hacked by them. As we mentioned before, authentication can be done through the public and private digital keys assigned to each device.
Advantages and Disadvantages of Blockchain“
Like any type of technology, “blockchain” has many advantages and disadvantages that must be considered…
One of the main features of the “blockchain” lies in the high level of security it offers, which means that it can protect and secure sensitive data and online transactions, and it is also suitable for anyone looking for fast and convenient transactions. , because transactions take only a few minutes to complete while other methods take several days to complete, and there is no third-party intervention to complete transactions such as banks, financial institutions, and government organizations, and this is what many users see as a real benefit.
Encryption – upon which the “blockchain” is based – uses two types of encryption keys, public and private. As reported, there are some issues with private keys. If the user loses his private key, he will be in a big trouble that is difficult to get out of, and this is one of the disadvantages of the “block chain”.
In addition, another problem is “expansion limitations” since the number of transactions is limited, so it can take several hours to complete multiple transactions and other tasks, and it can be difficult to change or add information after it is recorded, and perhaps the most serious flaw in the “blockchain” is its use in activities It is illegal as it mainly relies on the dark web and the deep internet, which causes unwanted risks.
Blockchain technology has solved many problems and created others, and it is likely that completely new solutions to the problems faced by users will appear, and a new banking system will emerge with new changes based on the digital world in which we live. began to live.
The question everyone is asking is will the “blockchain” technology overcome the technical challenges and find a place for itself in the current digital environment, and will appropriate solutions be found for the current problems and the “blockchain” will be officially adopted on a a large scale?