Blockchain technology and the smart contracts

  • webtech

Blockchain is the technology that makes possible to store records in a public peer to peer network. This kind of technology allows someone to transfer the ownership on a piece of information to another user, the same time is preventing the replication from a third party. While a transaction begins, the system sign and pack it with other transactions that happened the last 10 minutes in the network, the packet of the transactions is called block. Every block has a timestamp and transmitted to the network for validation by multiple independent nodes ( the nodes are the miners, which provide computer power for verification in the p2p network and for exchange get transaction fees or coins that generated by the network). When the nodes complete the validation, the block is attached to public ledger the blockchain and the change is transmitted to all nodes that contain full copies of the public ledger.

Bitcoin

One of the blockchain applications is bitcoin, a digital currency that allows the transfer value from one individual to another, in bottom line is just a creation of new records in a public distributed ledger. The logic behind electronic currency is the same as buying products with your credit card, in backend is a change in banks records, the difference here is that the change of records is stored to bitcoin decentralized network instead of keeping them in a central authority.

Smart Contracts

Another application is ethereum, a p2p network where you can run smart contracts. Instead of deploying only a currency, you can use smart contracts which are objects that contain functions of codes. So the creator of a contract can define initially the behavior of the contract when deploy the contract the execution or the duration of it is provided by the ethereum network. Ethereum makes a broader use of blockchain technology to run decentralized applications in their p2p network. Examples of smart contracts are an auction, a crowdfunding campaign without a third party involved, a voting mechanism.

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