Blockchain Made Easy!

What is blockchain?

Generally speaking, blockchain technology is a method of bookkeeping that involves the participation of everyone. Behind every system of blockchain, there’s a database. The database can be considered as a big account book. Hence, the person in charge of the bookkeeping of this account book becomes very important. Nowadays, the bookkeeping of the account books of different systems is normally managed by the systems themselves. For example, the account book of WeChat is managed by Tencent and the account book of Taobao is managed by Alibaba.

However, in the system of blockchain, everyone in the system has the opportunity to participate in the bookkeeping. If any data changes during a certain amount of time, anyone in the system can do the bookkeeping. The system will judge and select the person who conducts best and quickest bookkeeping within this period of time, write the content that person recorded into the account book, and distribute the content of the account book within this period of time to everyone in the system for backup. In this way, everyone in the system obtains a complete account book. This method is called blockchain technology.

What problem does blockchain technology solve?

Blockchain technology solves the problem of intermediate credit. In the past, it was very hard for two strangers who don’t know and trust each other to establish cooperation, and a third party was required to guarantee the successful cooperation in such situation. For example, in the past, during any transfer of any payment activity, an organization like a bank or Alipay is required for the transfer to be conducted successfully. However, through the technology of blockchain, the transfer activities that are mutually trusted by both parties can be easily conducted. This is the significant breakthrough of blockchain technology.

Which industries can blockchain technology apply to?

The main advantages of blockchain technology are that it doesn’t require the participation of any agencies in between, enables an efficient and transparent transaction process with low cost and highly secures the data. Hence, blockchain can potentially be applied to any industries that require their services to be conducted in the above manners.

Can we say blockchain is Bitcoin?

Blockchain technology is the underlying technology of Bitcoin. In the early stage of its development, as the underlying technology of Bitcoin, blockchain technology hasn’t attracted much attention at first. However, due to the fact that Bitcoin system has been running very smoothly and steadily all these years without the management and operation of any centralized organizations, and that no major problem has ever occurred during the running of the system over the years, blockchain technology has attracted much more attention now. Blockchain technology may potentially be applied to many other fields as well.

What are the major problems of the technical development of blockchain technology?

Currently, blockchain technology is still in its early development stage. Neither has blockchain technology formed a unified technical standard, nor has its various technical schemes reached perfect standards. Most of the scalability functions of blockchain haven’t been tested by practical use yet and are still in the stage of prototype design.

What’s the relationship between blockchain and big data?

Blockchain technology doesn’t have that much connection with big data technology. Big data technology is mainly responsible for the management of massive amount of data, whereas the core of blockchain is to enable the high security and dependability of the data without the regulation of a centralized agency. Hence, blockchain will not interfere with big data, and blockchain and big data will not replace each other either. Blockchain and big data are basically different data solutions under different scenarios.

Why does blockchain suddenly become a hot topic for discussion?

Apart from the booming effect of overseas market, one of the reasons that blockchain sector becomes increasingly prosperous is due to the conduction effect from equity investment market. Since the beginning of 2018, various famous private equity fund investors such as the founder of Zhen Fund Xu Xiaopin and the co-founder of China Creation Ventures Zhou Wei have expressed their optimistic outlook of blockchain technology. The founder of Zhen Fund Xu Xiaopin even urged the CEOs of some Internet companies to fully participate in the development of blockchain technology.

Compared with traditional Internet technologies, the advantage of blockchain technology itself is another factor that contributed to the booming of blockchain as a hot topic. The decentralization feature of blockchain technology enables companies to greatly reduce the cost of daily network operation and maintenance and transfer information in a more convenient and secure method.