Blockchain

Blockchain

What is it?

• It is a decentralized database that stores a registry of assets and transactions across a peer-to- peer network.
• It’s basically a public registry of  who owns what and who transacts what.
• The transactions are secured through cryptography, and over time, that transaction history get locked in blocks of data that are then cryptographically linked together and secured.
• This creates immutable and unforgeable record 不可改变， 不可伪造 of all the transactions across this network.
• This record is replicated on every computer that uses the network.
• Its closest in description to something like Wikipedia
• Don’t use intermedia ( bank , government, credit company)
• Its composite view that is constantly chaning and being updated.
• We can track changes and create our own wikis.
• Open infrastructure that stores many kinds of assets.开放的基础设施
• It stores the history of custodianship, ownership and locations for assets like the digital currency Bitcoin. ( or a title of a ownership of IP)
• It could be a certificate, a contract, real world objects, even personal identificable information
• Its public registry that stores transaction in a network  and is replicated so that its very secure and hard to tamper with.

How  blockchains lower uncertainty?

• not knowking who we are deal with.
• Not having visibility into a transaction
• Not having recourse if things go wrong

E.g If I want to buy a used smartphone on eBay. The first thing I am going to do is look up who I am buying from?

- Do they    

How is it used

Audit implication

• This technology is based on the P2P (Peer to Peer Peer Computing) network, which is called Bit coin network.
• the network is also decentralized.

E.g say you’re going to send me that smartphone by mail

- I want to know that the product I bought is the same one that arrives in the mail.

2. Each node has a complete backup

 -  improve the security of data

- resist the attacks on several nodes

- tamper with the impact of data on the transaction

3. The account books are stored in blocks

   -  can be understood as, divided into many small piece of storage

   - then each small pieces recorded address of the prior piece.

   - then the address link forms a chain.

In one sentence, Blockchain is a technical solution that collectively maintains a reliable database by way of de-centing and trust.

Blockchain is an account book.

1. Blockchain are saved in each of the node of Bitcoin on the internet.
2. Each node has a complete backup, which record all the bitcoin transaction since the birth of the bitcoin account.
3. Account book are stored in blocks
4. Each block contain a portion of transaction
5. Each block will record the previous block Id.
6. So they can form a chain structure .
7. When you want to launch a bit coin transaction, you can only broadcast the transaction information to P2P network
8. Then when the miner records your transaction information into a new block to the chain, the transaction is complete.

Why we need this? 

1. decentralize the cloud data storage

at present, mobile internet bring outbreak od cloud data storage and service. But all this is still based on the central model.

• the entire network would not have centralized hardware or management agancies.
• the rights and obligations among nodes are equal.
• The damage or loss from any node would not affect the operation of the entire system.
• So the Blockchain is strong

Current cloud storage

• is still centralized
• the user must trust the single storage provider.
• Similar to Airbnb’s space sharing model
• Users can rent out the remainder of  their hard disk space to dramatically increase the unitization of the cloud storage space.

1. trust

• data exchange from each node is no need to trust each other.
• The entire system  are transparent.
• All the data is transparent.
• So under the specific rules and time period, node fraud cannot happen.

1. in the past,

• when two people begin transaction, they cannot fully trust each other. So  they need banks as a mediator to ensure the issue of trust. ( to make the sale and purchase agreement valid.)
• if use blockchain, all transaction are automatically formed unbreakable contracts. ( and can be executed automacally)
• trust will become a enforceable law

1. break the information asymmetry

e.g real estate developer use the asymmetry between land costs and sales price

- in mobil internet based,  customers and manufactures can achieve win-win situation . ( the large number of intermediate link are broken)

Blockchain:

• a open and transparent society –wide credit system
• break asymmetric information in all societies.
• Not only in our society, but alos in countris, ,religious, will be broken.
• The spread of culture will be faster spread.
• Subvert 颠覆 the current way of life of all humankind.

By encrypting 加密the transaction record ( quite time to finish) to grow a chain of blocks, the people who want to make fraud need a huge cost( computer power) – make it impossible.

The Blockchain is a public ledger where transactions are recorded and confirmed anonymously. It’s a record of events that is shared between many parties. More importantly, once information is entered, it cannot be altered. So, if the blockchain is the public record, what is being recorded? What are all of these “transactions”?