Blockchain - The Money Transfer

Today, when I transfer money to my son who is studying in different country, a trusted third party (my bank) has to complete the transaction but this form of a trusted third party has some current issues:

• High Transaction fees
• Transaction takes time at least 3 days
• Centralized power with the trusted third party
• Private Ledger
• Prone to Hacks
• Double Spending

Blockchain uses various mathematical functions and algorithms to create a highly secure and distributed ledger, which enable transactions to execute without the need of third party.

 Blockchain has the solution to all the current issues:

• Zero or very minimal Transaction fees
• Transaction is done immediately
• Decentralized power
• Public Ledger
• Immutable to Hacks
• No double Spending

Blockchain concepts:

1.   Public Ledger: Public ledger is a chain of transactions that are taking place in one network. It is called public ledger because it is visible to every node on the network.

The public ledger provides some benefits:

-      Every one in the network can see where the money is

-      How much money everyone has in its wallet, literally unspent money

-      Every node of the network can validate the transaction

2.   Distributed Ledger: Distributed ledger means that a copy of the ledger will be distributed to every node of the network. So every node can have a copy of the events that took place in the network, this means we don’t need the centralized ledger that was maintained by the third party.

3.   Miners: They are the special nodes that compete with each other to validate a transaction that takes place in the network and add this transaction to the ledger. Miners have to solve complex math puzzles; these math puzzles ensure that the nodes continuously agree the current state of the ledger and every transaction in it. The winner’s Miner who validates the transaction, has also to find a random and special key to enable him to add the new transaction and block it. In order to find this key, the miner has to invest in very powerful computing resources to repeatedly search and guess the random key.

4.   Synchronized Ledger: Because the ledger is distributed among all nodes in the network, so same copy of the ledger must be synchronized and maintained. The winner miner who finds the special and random key and successfully added the new transaction to the ledger, this winner miner will broadcast the validated transaction and the special key (the block) to its peers to add it to their ledger then these peers propagate the transaction to their peers and so on

Blockchain is a revolutionary technology. It is data structure of blocks of transactions stored in a decentralized peer- to-peer network.

Blockchain can be used for a wide variety of applications such as cryptocurrency solution (Bitcoin), tracking ownership, digital assets, physical assets, or voting rights. It can also store and run computer code called ‘smart contracts’.

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About: Khaled Samy Hall

Khaled is the Co-founder and CEO at HYNO World company, and ST-United General Manager. Khaled has a long history of successful career growth in a variety of industries. He is currently the Book Author of "The ROI analysis: Project Management Office Development" and active Blogger.