Imagine Blockchain from the Simplest Way
By: Ahmad Zaenudin - April 26, 2018 Normal reading 3 minutes
The term blockchain for some people is no longer a foreign thing because it is related to digital bitcoin currencies. How to describe the concept in everyday life?
tirto.id - On January 9, 2009, Satoshi Nakamoto launched Bitcoin. He was assisted by a programming expert named Mike Hearn and Gavin Andresen who interacted online. Nakamoto sent an email to one of the two.
"I have moved on to other activities. "Bitcoin has been in good hands with you, with Gavin, and with everyone," Nakamoto wrote on Hearn via email.
After that, Nakamoto disappeared like being swallowed up by Earth. The conversation about who Nakamoto was was sticking out. He is considered a figure from the birth of Bitcoin, a phenomenal crypto currency.
"Visa credit card networks process around 15 million internet payments every day around the world. "Bitcoin is ready to process more than that with less devices and costs," Satoshi Nakamoto told Hearn at a time when he still hadn't chosen to disappear.
Nakamoto's rise to Bitcoin is inseparable from the technology that sustains the life of his crypto currency. The technology is called Blockchain.
Blockchain, don't just present. It is a technology that is inspired by technologies that have existed before. For example DigiCash, David Chaum's anonymous and undetectable digital currency system, Reusable Proof of Works (RPOW) technique, which is a token system that will provide incentives if something is done successfully, to peer-to-peer and cryptographic technology.
In general Blockchain is defined as a digital ledger, where each transaction is recorded chronologically and distributed to the public and secured by cryptographic techniques.
Technically, Blockchain, in this case Bitcoin transactions, begins with broadcasting transactions utilizing peer-to-peer, similar technologies such as downloading movies using Bittorrent. The transaction that is broadcast is called the term nodes. Transactions or nodes are validated by the community, whether they occur or not.
If true, nodes will be combined or recorded with other nodes forming a new block. Combined with existing blocks. In Wired's report, there are 200 thousand computers and continue to grow throughout the world that work together to form the Blockchain network, including helping to validate transactions and store each new block created.
The definition of Blockchain is not friendly to the ears of ordinary people. Ledgers, nodes, or blocks, are difficult to understand.
Understanding from the simplest
Bettina Warburg, researcher at Transformative Technologies, in Wired's multimedia program, describes Blockchain at various age levels. In kindergarten children, Warburg implicitly explains that Blockchain is not much different from the concept of conventional buying and selling transactions.
Conventional buying and selling transactions are done by visiting a shop or seller. However, when using Blockchain, Warburg told the children that "the transaction is the same, but does not need a store and does not need to be face to face with the figure of the seller."
In a simple example, Blockchain can be explained by a marble loan transaction between Andi and Wawan. Andi, who has 10 marbles lending 3 marbles to Wawan. Andi recorded 3 marbles borrowed by Wawan to remember them. In a conventional system, Wawan made it possible to avoid having received 3 marbles from Andi. The reason? Only Andi has a record of 3 marbles borrowed by Wawan. Wawan and other friends, do not have these records.
However, using the Blockchain system, when Andi was about to lend 3 marbles to Wawan, immediately the news of the transaction was distributed. Besides being received by Andi and Wawan, the news was also received by their other friends. Andi, Wawan, and other colleagues validated the transaction. If all said the transaction was true, the loan of 3 marbles was then recorded. Recording is not only in Andi's book, but also in all the books of Andi, Wawan, and other friends. To protect against fraud, the record is protected by a cover and each owner cannot delete the record.
In teenagers, who are used to using eBay or Tokopedia, Warburg says that Blockchain is actually just a tool to make transactions easier. When shopping at Tokopedia, users pay for their ordered items with a certain amount of money, either through credit cards or transfers. Transaction activities are assisted by third parties. Now, when using Blockchain, Warburg says that "you don't need eBay and any third party."
A more interesting explanation to understand what Blockchain comes from Nik Custodio, director of FTI Consulting, a digital business consulting firm. Through his writing in Coindesk, Custodio likens physical transactions and Blockchain transactions through an apple.
In physical transactions, if A gives B an apple, in simple terms, there is no significant problem. In A's hand, there is no apple left. While in hand B, there is an apple that he can treat as he pleases. However, what if the exchange of apples between A and B is not physical, but digital? When A transfers a digital apple to B, it is still possible that A has an apple. Why? Before transferring, A may be able to cheat by duplicating data, by sending a copy of the digital apple to C for example. This evil behavior in the technology world is called the "double-spending problem."
Blockchain, according to Custodio, implicitly eliminates the evil behavior of A. Blockchain ensures that when A gives a digital apple to B, there is no digital apple left in the hand of B. If it does, but it is a fake digital apple owned by A. Why? Because digital apple transactions from A to B are recorded in ledgers owned by all parties, not just A and B. To ensure anyone cannot engineer, the transaction is protected through cryptography.
Blockchain is a transaction recording system that enhances existing systems. Citing an upload in Forbes, Blockchain is an open technology, decentralizing ledgers that records every transaction between parties that does not require a third party or middle man, so it can reduce costs.
At the beginning of its appearance, Blockchain was close to Bitcoin. However, Blockchain is then understood as a technology that can be applied in many ways. Publication Fortune said, 15 percent of large banks around the world will implement Blockchain technology. Note Statista, Blockchain is likely to be used by nearly 60 percent of international money transfers. The Blockchain world is predicted to be worth $ 2.3 billion in 2012.
One company that is ready for the presence of Blockchain is Amazon. The company, founded by Jeff Bezos, at the end of the 3rd week of April 2018 officially released "AWS Blockchain Templates" on their cloud services. The service allows anyone to create a Blockchain system as they wish, and is supported by two technologies: Ethereum and Linux Foundation's Hyperledger Fabric.
With "AWS Blockchain Templates", companies can create Blockchain systems for the benefit of supply chain management, financial services, to trade bookkeeping. Blockchain is indeed not a simple thing for those who have not tried, but this system offers something simpler than conventional methods, including transactions in the banking world.
Also read articles related to BLOCKCHAIN or other interesting posts Ahmad Zaenudin
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Reporter: Ahmad Zaenudin
Author: Ahmad Zaenudin
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