Purpose of Blockchain¶
The blockchain keeps users’ data safe through the use of cryptography to code and decode messages, digital signatures, private and public keys, to access that data, and the immutable nature of the append only database that is a blockchain. Once confirmed, a transaction cannot be reversed. Only users with access to keys are allowed to create transactions from previous balances, and no one can interfere with a completed transfer. These strengths provide benefits for audit. Providers and recipients of data can be sure that data has not been altered. These benefits are not only useful for databases of financial transactions, but all digital transactions over the internet.
Decentralization is the transfer of decision making power and assignment of accountability and responsibility to all involved parties for results. Decentralization is achieved via a Peer-to-Peer (P2P) network that relies on a host of computers that can be geographically distributed around the world. It physically cannot work with a single computer or point-of-connection. Instead, it requires a slew of other computers to join in, in order to complete a specific task on the network.
Internet privacy concerns the rights and policies related with data that can be used to identify an individual; specifically, storing, repurposing, provision to third parties, and displaying of said information. The categories of data are Personally Identifying Information (PII) or non-PII, information such as a site visitors behaviour on a website.
Blockchain does not require a users identity to securely function in the network. A pseudonym or alias is a name that a person or group assumes for a particular purpose, which can differ from their true name or identifying details. With techniques like digital signatures, cryptography and hashing, privacy of the user can be maintained with an address being used as a pseudonym.
In further iterations of blockchain technology, once a user decides to share PII or non-PII, that user will have full control of who can see and use this information, very different from the current situation with 3rd party applications selling your information off to the highest bidder.
The blockchain is a public registry of who owns what and who transacted what. This auditable, shared ledger make it is possible for anyone to track the movement of transactions and resulting balances throughout the network. By using a block explorer like: https://chainz.cryptoid.info/strat/ you can track a multitude of details; track an address to see what transactions it has made and to what addresses, you can see a breakdown of token ownership throughout the network down to the “rich list” or biggest owner of tokens of that blockchain.
Trust is the cornerstone of any transaction. Knowing you will receive what is expected from the party you are making the agreement with has always required a middle man to perform tasks such as holding assets in escrow or verifying identities. With the blockchain, trust is established through mass collaboration and clever code rather than through a powerful institution that does the authentication and the settlement. Cryptography and consensus are two of the features of blockchain which make trust issues a thing of the past when transacting safely.