Using the blockchain for transferring funds
Blockchain transactions are fast and transparent
Happy 2018 everyone! We hope you had a fantastic time and a little PURA Vida! To tide you over into the new year, we are starting out with more basics for those of you who are just joining in. We will start by explaining the principle behind a blockchain. Please also visit our FAQ section to find answers to the most common questions.
The term Blockchain stands for a public ledger of data entries. A blockchain provides digital storage of transactions. An up-to-date copy of each ledger is recorded on every single one of over thousands or more computers, called nodes. This is how the principle works: Person A wants to send Person B five dollars. This is called a “peer-to-peer” transaction. Sender and recipient do not require banks or other intermediaries for this. The data base then records each step of this process in a new block and lines up the segments like a chain. Every step is recorded, from the initial transfer of the fund to the final confirmation: transfer of the amount has been successful. All the new information is simultaneously transferred to hundreds, thousands or even millions of computers within minutes.
Safety of the blockchain
Now, if a criminal decides to hack this transaction and to tamper with the transmission on a node in the internet, he will not be successful. He can insist that he is the true recipient of the five dollars all he wants. However, the blockchain will keep reporting that Person B is the authorized recipient as all 999 other computers that are part of the process name person B as the recipient.
Although this technology is extremely innovative, there is no absolute safety in the net. Consequently, the hacker could try to attack thousands of data entries on thousands of blockchain records but this is highly implausible. Thus, the risk compared to hacker attacks of bank accounts and credit card data is minimal. In summary, thanks to these features, the blockchain is an operating network that will run future business models.
(Source: This article is based on a post by Karl-Heinz Land on It-Daily and IT-Management Magazine 11/2017.)