This process of verification is carried out by some members of the network called miners. The miners use specialized and easily available software along with the processing power of their computers to verify the transactions. This sounds simple enough, but the processing power required to do so is quite herculean.
And since the miners are using their bandwidth and electricity to do the verification process, they need to be compensated. This is where the Block Chain begin to take shape. Essentially the miner has created a verified transaction file which holds a copied record of all the transactions that have occurred in the network over the past 10 minutes.
Blockchain Currencies That Evolved Post Bitcoin
The word to highlight here is verified. The miner uses the computational power of his computer to assure all members of the network that each transaction is between 2 parties only and that there is no problem of double spending. For his efforts, the miner is compensated in Bitcoins.
The total amount of Bitcoins that can ever exist is fixed at 21 million. As the quantity of money is fixed, the payment made to the miner is much like mining currency out of a reservoir. As each transaction in every block is made at a specific time, each block is linked to the previous block of transactions. By grouping these blocks we get what is referred to as the Block Chain. And since this grouping of blocks occurs as per the protocol dictated by the algorithm underpinning the creation of Bitcoins, this protocol is defined as the Block Chain protocol.
But irrespective of the currency and the frequently debated deflation issues, the underlying Block Chain protocol and the distributed computing architecture used to achieve its value remain the same. Just as the open communications protocol created profitable business services by catapulting innovation, the Block-chain protocol offers a similar foundation on which businesses can create value-added chains.
Using the integrity lattice of the transactions, a whole suite of value trading innovations are beginning to enter the market. One company that is making use of this concept is ChangeCoin. ChangeCoin offers a micropayment Infrastructure for the Web. Say you read an article on a popular website, but the freemium version only lets you read quarter of the article and requires a minimum subscription to access the entire article.
Block Chain 2.0: The Renaissance of Money
A good way forward based on this concept would be to cable TV subscriptions, where consumers can pay for the 4 or 5 channels that they regularly watch rather than paying for a suite of Another application is for WiFi hotspots where users pay exactly their data consumption. A user could pre-allocate a connectivity budget and micropayment software could take care of paying for the data connection with no user intervention.
ChangeCoin has also created a boon for content creators and bloggers in the form of ChangeTip.
Consumers can now use Bitcoin to tip a content creator with a small sum even 5 cents instead of just liking an article. Not only is this an innovative way to show appreciation but it will change the business model of content creation and curation. This relatively new concept involves the development of programs that can be entrusted with money.
Smart contracts are programs that encode certain conditions and outcomes.
Only after verification is the sum transmitted to the suppliers account. By developing ready to use programs that function on predetermined conditions between the supplier and the client, smart programs ensure a secure escrow service in real time at near zero marginal cost. One company that is making dramatic foray here is Codius which offers an ecosystem for Smart Contracts. Apart from Financial transactions, smart contracts are now entering the Legal System.
Companies like Empowered Law use the public distributed ledger of transactions that makes up the Block Chain to provide Multi-Signature account services for asset protection, estate planning, dispute resolution, leasing and corporate governance. Building up on colored coins, digital assets are assets whose ownership is recorded digitally. Bitcoins are of digital assets, but since the Block Chain is a decentralized asset registry, it can also be used to register ownership and transfer of any digital asset besides bitcoins.
In this way, a digital bond could pay coupons and redeem the principal to the address holding the digital bond, without the need of custodians. Taking this concept one step further is in the form of Smart Properties. A Smart Property is a property that has access to the Block Chain, and can take actions based on the information published there. Another way to look at it is that smart property can be controlled via the Block Chain. Eg: A car whose ownership is represented by a digital asset in the Block Chain.
The physical car is connected to the internet and can read the Block Chain. Therefore it can keep track of the status of the digital asset representing it. As the digital asset is transferred from one address to another, the physical car can see this status update in the Block Chain and take necessary actions, i. Ethereum and the MIST browser — Ethereum intends to bring together both a crypto ledger and a Turing-complete programming language, which is a language can be used to simulate any other computer language not just its own.
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This study aims to discuss the fundamentals of Blockchain. In this paper, the technology or working procedure of Blockchain including many applications in several fields are discussed. Finally, future work directions and open research challenges in the domain of Blockchain have been also discussed in detail. This is a preview of subscription content, access via your institution. Rent this article via DeepDyve. Nakamoto S Bitcoin: a peer-to-peer electronic cash system. Accessed on 13 April Disruptive innovation in financial services: a blueprint for digital identity.
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Amendment No.8 to Form S-1
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