Lately you can't get around them: the Blockchain. In many places it is considered the technology of the future. More and more areas of application are appearing on the scene. But how does it actually work? Don't worry: Despite all its complexity, its basic features are not that difficult to understand.
Blockchain as antithesis to the cloud
The block chain is a network, usually within the Internet. It can also be used in an intranet. It can be seen as an antithesis to the cloud. Information is not stored somewhere on a server, but locally on all computers in the network - keyword: decentralized. This is also the reason why the technology is considered to be particularly secure: In order to falsify information, not a server would have to be hacked, but every single computer in the block chain. Therefore, the network must reach a "critical mass" of users in order to be truly secure. After all, 50 computers could still be hacked individually. With 50,000 computers, however, the attempt seems hopeless.
But how is the information stored? What is a block? And why "chain"?
Table with three columns Very simplified one can imagine a block as an Excel table. Of course it is not, but the architecture is not dissimilar. In the case of crypto-currencies like Bitcoin, this table has three essential columns: "User A", "User B" and "transferred amount X". One of the users on the network now transfers a certain Bitcoin amount to another - this happens directly, from machine to machine. In the table this is now entered anonymously. The table can be found on all computers in the network. This means that all other users automatically keep records of the transaction. This confirms that it has actually taken place. The block: "Full" table is sealed Every transfer that is made within the network is entered in the table and it fills up line by line. As you know from Excel tables, the loading time increases with the size of the table. It cannot therefore continue indefinitely. For this reason, it is closed, sealed and stored at a certain size. A finished block is created. After one block is completed and sealed, the next one is started. A chain of blocks is created - Voilá: the block chain.
Hardware wallet as protection against coin theft
There is a weak point in the wallet on your own computer or on the individual server: While the transactions cannot be falsified by the mass of users in the block chain (at least in theory), the security of the coins on the home computer or server of the provider itself must be guaranteed. In concrete terms, there is a so-called "private key" for access - a code that must be protected. There are some known cases of coin theft by hackers. Local storage, however, makes it possible to "store" one's money outside the network access - on a so-called "hardware wallet". This is usually nothing more than a USB stick with special wallet software. And at the end of the day you have a physically available wallet again.
The blockchain technology and investment in cryptocurrency move the economy: banks, insurance companies or logistics firms - hardly ...