Informamuse 10 October 2018

Blockchain

The distributed technology that changes the management of information and value

Historical information

The first distributed blockchain was distributed from an anonymous person or a group known as Satoshi Nakamoto in 2008 and implemented next year as a principal component of a digital value named bitcoin as a distributed ledger. In the beginning he ledger was really small, in 2014 it reached the 20GBs size and right now is about 148GBs. Bitcoin value has been very volatile to increaseexponentially over the last year. Smart contracts were first proposed by NickSzabo, who coined the term, in 1994. He described how it would be possible toestablish contract law and related business practices through the design ofelectronic commerce protocols, between strangers on the Internet.

What is

It’s a Technology for the management of transactions, between two or more parties, stored in a Ledger and Distributed over several nodes on a network. Each transaction can be performed with the exchange of a token in the form of a Cryptocurrency, a regular currency or an asset. The transaction between parties has information about the public address of the receiver, the transaction itself and the Cryptographic Key. A new Block is created with the transaction and other transactions. Once the block is ready, the Block is added at the tail of the Chain. The Blockchain term is therefore referred to a Chain of Blocks where each block is chained in a secure, immutable and transparent way.

How does it work


The blockchain uses cryptographic and security technologies that ensure data immutability and deny access to those who do not hold the correct permissions. The data contained within the blocks are alphanumeric strings that are referable to information relating to the property and / or the exchange of something.

The exchange relationship between the subjects is called the transaction and for each transaction it is necessary to know at least the following information

  • Which asset has been transferred
  • Who transferred it and who received it
  • When the transaction was made
  • If a payment has been made to make the transaction
  • A proof that whoever transferred the property really wanted to do it
01Two individuals have to make a transaction.
02All data related to transaction’s sender, to the transaction itself and to transaction’s receiver are defined.
03A new Block is created with data related to the transaction and other transactions.
04The new block is validated and added to the chain.

Blockchain typologies

The Blockchain is a versatile technology that can be adapted to any need. It is distinguished mainly in Permissionless and Permissioned, public or private.

Permissionless. Used for all financial applications, for the management of cryptocurrencies is a network designed not to be controlled, allowing all nodes to update the data stored in the registry and to access the immutable copies of all transactions approved by consent. It can be used as a global database for documents that do not need continuous changes or that are unchangeable over time, as in the case of property contracts or wills.

Permissioned. Used in sectors other than financial, especially thanks to the implementation of Smart Contracts. An organization determines who can join the network, who can carry out the validation process and who can execute the transactions. This type of Blockchain can be used by institutions, large companies that have to manage supply chains with a series of actors, companies that have to manage suppliers and subcontractors, banks, service companies, retail operators, consortia and the business world in general.

Permissionless Permissioned
WHO ARE THE USERS
Anyone
Only autorized nodes
WHO CAN WRITE DATA
Anyone
Only enabled nodes
WHO CAN READ DATA
Anyone if is public

Only enabled nodes if it is private
Anyone if is public

Only enabled nodes if it is private
WHERE DATA ARE STORED
Distributed and shared between all nodes
Distributed and shared between all nodes
ADVANTAGES
No one has control

No one can delete it
A control authority is defined

Easily scalable

No mining
DISADVANTAGES
Transactions have to be paid

Mining

Pollution
Selective access to data
APPLICATION FIELDS
Cryptocurrency

Business support
Public Services support