If you want to understand the application of blockchain, you can refer to many books and opinions, including "Blockchain in Pictures", "Blockchain: Reshaping the Economy and the World", "New Economic Blueprint and Introduction", and The articles on Binance Community include a detailed understanding of the Binance Community platform, which is very powerful.
1. What is blockchain
Blockchain, as the name suggests, is composed of blocks and chains. It is a distributed data storage , point-to-point transmission, authentication mechanism, encryption algorithm and other new application models of computer technology. It is a chained data structure that combines data blocks in chronological order and is cryptographically guaranteed to be an untamperable, unforgeable, safe and trustworthy distributed ledger.
In 2008, Satoshi Nakamoto first proposed the concept of blockchain and encrypted digital currency in his paper "Bitcoin: A Peer-to-Peer Electronic Cash System". Starting with Bitcoin, blockchain has become the underlying technology for various digital currencies.
2. The working principle of blockchain:
1. Basic concepts include:
(1) Transaction: One operation will make the ledger The status changes once, such as adding a record;
(2) Block: records transactions and status data that occurred within a specified time, which is a comprehensive understanding and preservation of the current ledger status;
(3) Chain: It is composed of blocks connected in chronological order. It is a log record of the entire state change.
Understanding the working concept of blockchain, it is not difficult to understand its working principle. Suppose there is a distributed data record book. This record book only allows additions, deletions and changes. Its structure is A linear chain composed of "blocks" connected in series (this is also the origin of the name "blockchain"). To add new data, it must be placed in a new block. The maintenance node can propose a new blocks, but a certain consensus mechanism must be used to reach agreement on the final selected block.
2. Take Bitcoin as an example to see how the blockchain works.
Bitcoin blocks are divided into two parts: block header and block body.
3. The core advantages and characteristics of blockchain
1. Decentralization
The verification, accounting, storage, maintenance and Transmission and other processes are based on a distributed system structure. There is no centralized hardware or management organization. The rights and obligations of any node are equal. The data blocks in the system are maintained by nodes with maintenance functions in the entire system. Same maintenance.
2. Open and transparent
The system is open. In addition to the private information of the transaction parties being encrypted, the blockchain data is open to everyone, and anyone can The interface queries blockchain data and develops related applications, so the entire system information is highly transparent.
3. Security
The blockchain adopts consensus-based specifications and protocols (such as a set of open and transparent algorithms) to enable all nodes in the entire system to trustlessly The free and safe exchange of data in the environment changes trust in "people" to trust in machines, and any human intervention has no effect.
4. Information cannot be tampered
Once the information is verified and added to the blockchain, it will be stored permanently unless more than 51% of the system can be controlled at the same time (almost never possible) nodes, otherwise modifications to the database on a single node will be invalid, so the data stability and reliability of the blockchain are extremely high.
5. Anonymity
Since the exchange between nodes follows a fixed algorithm, the data interaction does not require trust (the program rules in the blockchain will judge whether the activity is valid by itself) ), so the counterparty does not need to disclose its identity to make the other party trust itself, which is very helpful for the accumulation of credit.
4. Classification of Blockchains
Currently, the most mainstream classification of Blockchains is to divide Blockchains into Public Blockchains based on different participants. ), Private Blockchain and Consortium Blockchain.
1. Public chain: Anyone can participate in the use and maintenance, and can obtain effective confirmation of the blockchain. The public chain is the earliest blockchain and the most widely used blockchain at present. , typically such as the Bitcoin blockchain, the information is completely public.
If a permission mechanism is introduced, it will include private chain and alliance chain.
2. Private chain: A company or individual only uses blockchain technology and has exclusive write permission to the blockchain, and the information is not made public. At present, conservative giants (traditional finance) all want to experiment with private blockchains, and the application products of private blockchains are still being explored.
3. Alliance chain: It is a blockchain between the public chain and the virtual chain, and is jointly controlled by multiple organizations. The use of this chain is managed with authority and can be controlled. For managers, it is also open to others according to the manager’s wishes.
In addition, according to the different usage scenarios and purposes of blockchain, it is divided into currency chains for the purpose of digital currency, property rights chains for the purpose of recording property rights, and crowdfunding for the purpose of crowdfunding. Chip chain, etc.
5. Analysis of specific application scenarios of blockchain
1. Information anti-counterfeiting
On May 28, Tencent CEO Ma Huateng spoke at the Guiyang Digital Expo The problem of Moutai anti-counterfeiting is raised: the anti-counterfeiting method based on cloud-based comprehensive blockchain technology will be much more efficient than traditional anti-counterfeiting methods. In future anti-counterfeiting verification scenarios, users may only need to perform a simple scan with their mobile phone to obtain a large amount of complete information based on different dimensions.
Take Moutai as an example:
Distillery address, production workshop, operating employees, inspectors, factory time, transportation vehicle information and driver information,
The vintage source of raw materials for wine, raw material suppliers, storage warehouse numbers, raw material transportation vehicles and driver information,
All information can be accurately traced, permanently recorded and cannot be tampered with.
The authenticity can be easily verified based on the above information.
2. Food safety issues
As early as November last year, Walmart had cooperated with IBM to ensure food safety by using blockchain technology to track food sources. safety and increase the circulation of food to reduce costs. For large supermarkets such as Wal-Mart, when food safety problems occurred in the past, it took several days to investigate the source of the problematic food. After using this technology, only one piece of information about the product is required. It is possible to achieve accurate traceability of important information such as food origin, inspectors, suppliers, logistics and transportation, and problems can be quickly discovered within a few minutes. Currently, products tracked using blockchain include packaging products in the United States and pork in China.
3. Information Security
Blockchain technology is promoting a revolution in information security technology. Three major security threats: man-in-the-middle attack, data tampering, and DDoS
(1) Identity protection
PKI is a common public key encryption used in various communication applications such as email, messaging applications, and websites. technology. However, since most PKI implementations rely on a centralized trusted third-party certification authority (CA) to issue, activate and store user certificates, hackers can attack PKI to fake user identities or crack encrypted information.
CertCoin is the first blockchain PKI implementation, coming from MIT, which removes the centralized certification center and uses the blockchain as a distributed ledger of domain names and public keys.
Pomcor Company: Blockchain PKI implementation path: retain the certification center and use the blockchain to store hash values ??of issued and activated certificates. Users can verify the authenticity of certificates through decentralized and transparent sources, while also improving network access performance through local authentication of keys and signatures based on blockchain copies.
(2) Data integrity protection
GuardTime has developed a keyless signature architecture (KSI) based on blockchain technology to replace key-based data authentication technology. KSI stores hashes of the original data and files on the blockchain, runs hashing algorithms to verify other copies, and compares the results with the data stored on the blockchain. Any tampering with the data will be quickly detected because the original hash table is stored on millions of nodes.
(3) Protection of critical infrastructure
The "Achilles' heel" of the Internet, DDoS has entered the TB era, and DDoS is still the easiest way for hackers to bring down big targets at low cost. As a weapon, DNS services are the primary target for hackers to carry out large-scale damage, but blockchain technology is expected to fundamentally solve it.
The distributed storage of blockchain makes hacker attacks lose focus. Nebulis is developing a distributed DNS system using the Ethereum blockchain and the InterPlanetary Internet File System (IPFS, a distributed alternative to HTTP product) to register and resolve domain names. The biggest weakness of DNS is caching. Caching makes DDoS attacks possible and is also the bane of centralized governments censoring social networks and manipulating DNS registrations. A highly transparent, distributed DNS system can effectively prevent any entity, including the government, from manipulating records.
IV. Financial Industry
(1) Digital Currency: Improving the convenience of currency issuance and use
For example, foreign Bitcoin and Ethereum, our country currently There are Nuo Compao and so on.
From the use of physical transactions, to physical currency and credit currency, to the rise of the Bitcoin network, more people are aware of the distributed ledger blockchain technology behind it, and gradually outside of digital currency applied in many scenarios.
(2) Cross-border payment and settlement: realize point-to-point transactions and reduce intermediate costs
Transfer and payment. At present, the most mature application of blockchain technology is payment and transfer. Blockchain technology can avoid complicated systems, save the process of inter-bank reconciliation and review, and speed up settlement; using virtual currency does not require the intervention of a clearing house, reducing transaction fees. The clearing procedures of each country are different. It takes 2 or 3 days for a single remittance to arrive, which is inefficient and accounts for a large proportion of funds in transit. No longer going through a third party, point-to-point payment is formed through blockchain technology. Eliminating the need for third-party institutions, you can make payments throughout the day, receive money in real time, quickly withdraw cash, and reduce hidden costs, helping to avoid financial risks. It is timely and convenient.
(3) Bills and supply chain financial business: reduce human intervention, reduce costs and operational risks
Point-to-point value transfer, physical bills or central system for control and verification; intermediary will be eliminated and human intervention reduced. Improved efficiency, smoother financing channels, lower risks, and benefits for all parties.
(4) Securities issuance and trading: realize quasi-real-time asset transfer and accelerate transaction clearing speed
The application of blockchain technology can make the securities trading process simpler, more transparent and faster , Reduce IT systems with repetitive functions and improve the efficiency of market operations. For stocks, blockchain can eliminate paper and pen or spreadsheet records, reduce human errors in transactions, and improve the transparency and traceability of trading platforms. Citi and Nasdaq collaborate to advance blockchain applications.
(5) Customer credit reporting and anti-fraud: reduce legal compliance costs and prevent financial crimes
Customer information and transaction records recorded in the blockchain help banks identify Abnormal transactions and effectively prevent fraud. The technical characteristics of blockchain can change the existing credit reporting system. When banks perform "know your customer" (KYC), the data of customers with bad records will be stored in the blockchain.
Equity crowdfunding: Equity crowdfunding based on blockchain technology can achieve decentralized trust and investors’ returns are guaranteed.
5. Supply chain management
Distributed ledger system, participants track the ownership of assets throughout the process, and can be used to track auto parts when moving between countries and factories.
Toyota is developing blockchain technology solutions for its core parts supply chain operations. Using a large amount of data helps Toyota more efficiently ensure the accuracy of recorded data and can also help manage the supply chain. At the same time, the blockchain supply chain can control warranty, repair goods-related costs and specifications through smart contracts, and transactions throughout the product life cycle are irrevocable.
The shipping industry’s first public security solution, deployed by Maritime Transport International (MTI), uses blockchain supply chain technology to share Verified Gross Mass (VGM) information for shipping containers . Information about container VGM is important to ensure ships are properly stowed and to prevent accidents at sea and in ports. VGM data is stored on the blockchain supply chain, providing a permanent record for port officials, shipping companies, shippers and cargo owners. This replaces cumbersome logs, spreadsheets, data brokers and private databases.
Logistics Integrity System Wagonbang Wagonbang launched a blockchain-based financial solution for logistics enterprises, aiming to provide enterprises with reliable financial services. It can not only help drivers solve the problem of loan difficulty, but also change the current situation of lack of integrity in the industry and help build a logistics integrity system. Help build the identity chain of logistics companies and create a trusted data ecosystem for logistics companies. Using a transparent, supervisory, and traceable algorithm model, we screen reliable companies that need financial support and provide them with financial services. On the other hand, at the technical level, various law enforcement agencies are linked to jointly punish dishonest companies.
6. Government management
(1) Election
Based on the characteristics of blockchain technology and considering the shortcomings of current election technology, we will build an open source , Blockchain applications for elections, voting and lottery, we call it ElectionChain. We hope to optimize election and voting technology to make voting more open and transparent, reduce human manipulation, and allow voters to verify their election results.
Including identity authentication, multi-chain system, flash investment protocol, encryption algorithm EDPOS, privacy protection, voting mechanism design, decentralized ELC rental market, storage solutions, smart contracts, etc.
(2) Government services
Aiming to realize an e-government digital ecosystem based on blockchain technology and provide citizens with government services and an automated mechanism for the business of various government departments, it must be All areas of national government affairs are combined to form a unique information space, including government agencies, economic data, financial transactions and social fields. This ecosystem should also include registration authorities and corresponding software for building smart contract-based applications and platforms for government agencies, enterprises and public users.