There are are many different implications that arise through the existence of the Bitcoin Blockchain. This part of the guide serves to clear up misconceptions about the blockchain in general, how it works, and why it is considered secure.
In the end, you can also find a video that provides you with a visual representation of how the blockchain works.
It prevents double spendingDouble spending is currently considered as a financial attack that hopes to spend the same set of Bitcoin in multiple transactions. To prevent this, the blockchain uses transaction validation. By referencing the previous financial history of Bitcoin, before realizing a transaction, the network rechecks the validity of said transaction. It checks whether the address has the amount of Bitcoin that it’s trying to send and whether the address has already spent the coins or not. The whole network communicates to find out the truth, and the transaction is processed after every full node reaches consensus.
This, in turn, provides a strong defense against double spending attacks and denies would-be attackers the possibility of realizing their fraudulent goal.
Publicly stores all dataThe Bitcoin blockchain stores all data publicly available. Anyone can download the whole history of Bitcoin transactions, or parts of it. It can be used to research social tendencies or improve the understanding of human consumption. Note that not every blockchain is publicly available. Through the use of proper cryptography, blockchains can be restricted to provide data only to selected few that hold the correct key. While this is not the case with Bitcoin, it provides an answer to the question. Can Blockchains be implemented to store confidential data?
Can Blockchains be implemented to store confidential data?
Yes, they can. But for the purposes of this guide, we will continue to focus on public blockchains.
Beyond BitcoinBlockchains have a massive potential to be utilized in many aspects of human life. The ever long issue of government corruption and tax evasion charges can be eliminated through the uses of Blockchain. Identification, medical records, and even tax collections can be stored publicly (or privately).
One curious implementation of Blockchain technology for tax collection can be utilized to ensure that taxes are being used in a constructive way. It could also provide citizens with enough transparency to trust their governments or evidence when their taxes are used unlawfully.
Blockchains, if implemented correctly can prove to be the best tool that humanity has to solve its own moral issues.
Visual representation of BlockchainsMost of us are visual creatures and learning through some form of visual material is scientifically proven to boost student engagement and information retention. This video below is one of the best visual representations that we can find on the internet.
It is 17 minutes long, but it should be highly useful if you’re looking to enhance your understanding of blockchains. A lot of thanks to the creator of this amazing representation.