FreshMan's view of Block Chain as a concept

Welcome to Freshman's view of the rapidly growing BLOCK CHAIN concept and how it impacts the way we have been dealing with traditional security in designing transactions flow.

 Summary:

1.    What is Block Chain and the hullaballoo around it?

2.    The paradigm shift from our existing approaches vs Block Chain?

3.    What does it mean to you as an IT developer?

4.    Implementation examples.

 What is Block Chain (BC)? 

 A concept originally invented to secure the cryptocurrency transactions, mainly Bitcoin is now being leveraged in securing Documents sharing, Digital records and anything (soft copy) of value from fraudulent activities.

 In not so Freshman's terms:

 The Block Chain network lives in a state of consensus, one that automatically checks in with itself every ten minutes. A kind of self-auditing ecosystem of a digital value, the network reconciles every transaction that happens in ten-minute intervals. Each group of these transactions is referred to as a “block”. Two important properties result from this:

1.    Transparency data is embedded within the network as a whole, by definition it is public.

2.    It cannot be corrupted. Altering any unit of information on the Block Chain would mean using a huge amount of computing power to override the entire network.

 Refer to more here.

 Converted to Freshman's view:

 Consider BC as a network of high-end machines that are in continuous sync. Now, the data created/updated on one machine of a BC's network is immediately distributed/shared/synced across all the other machines. That way, instead of a server storing the file and sharing it on a request basis, everyone in the network is a server with an original piece of the shit, of course, the decryption will happen if that data belongs to us. How interesting!!

Of course, some stupid naturalist will raise Global Warming questions, but to them, I ask “what is more important - your stupid nature or our safe transactions” (Pun intended)!!

Paradigm shift

Old Gods (Locking transactions) vs The new Seven (Block Chain)

As the analogy suggests, I am a big fan of GOT and those who do not understand the reference we say "SHAME ON YOU, CERSEI!!"

Below details, the existing implementation(old Gods), courtest Mr. William Mougayar

“The traditional way of sharing documents with collaboration is to send a Microsoft Word document to another recipient and ask them to make revisions to it. The problem with that scenario is that you need to wait until receiving a return copy before you can see or make other changes because you are locked out of editing it until the other person is done with it. That’s how databases work today. Two owners can’t be messing with the same record at once.That’s how banks maintain money balances and transfers; they briefly lock access (or decrease the balance) while they make a transfer, then update the other side, then re-open access (or update again).”

Of course, we don’t need BC to share documents henceforth but it comes handy as you can refer to the second implementation example.

What does it mean for an IT Developer?

Currently, finance offers the strongest use cases for the BC technology. International remittances, for instance. The World Bank estimates that over $430 billion US in money transfers were sent in 2015. Eureka!! Hence the high demand for Block Chain developers.

The Block Chain potentially cuts out the middleman for these types of transactions. Personal computing became accessible to the general public with the invention of the Graphical User Interface (GUI), which took the form of a “desktop”. Similarly, the most common GUI devised for the Block Chain is the so-called “wallet” applications, which people use to buy things with Bitcoin, and store it along with other cryptocurrencies.

Transactions online are closely connected to the processes of identity verification. It is easy to imagine that wallet apps will transform in the coming years to include other types of identity management.

Implementation examples

1.    Cryptocurrencies

Ever heard of crypto mining? Of course who haven’t? But let's say you are the intended audience and are new to this X-men task, read on. Every cryptocurrency has its own BC network. For the first time, the issuer issues a predefined amount of cryptocurrency in the forms of blocks and all you have to do is to install a heavy duty infrastructure and write some obnoxious algorithms to solve the mathematical problems associated with the blocks. If you are successful in solving it before anyone else does, you are compensated in the forms of transaction fees or in some cases currency itself. The time and efforts required are huge, example the amount of bitcoin issued with each block is divided by 2 for every 210 000 blocks mined.

Now even though the block is available in public, it is secured and only the intended recipient can own it. ( Which in the above example is the winner miner)

2.    Documents secure sharing

This example relates to one practical problem finance institutions are facing that is sharing legal documents such as LOUs amongst each other.

 There is a widely accepted provision of bank guarantees known as a letter of undertaking (LOU) under which a bank can allow its customer to raise money from another Indian bank's foreign branch in the form of a short-term credit. The LOU serves the purpose of a bank guarantee for a bank's customer for making payment to its offshore suppliers in the foreign currency.

 Now, to avoid situations where borrower uses fraudulent LOU acquired due to scrupulous means, a few private firms have come up with a solution of using Block Chain networks concept. The BC network consisting of participating banks will be used to store legal documents like LOU. In addition, an extra layer of encryption will be embedded to the document blocks so that only the whitelisted banks specified by the issuer bank can view those documents.

 So let's say, PNB is the bank that issues LoU. Any third party banks who have tie-ups with PNB and honors the PNB's LoU will go to the Block Chain network to access the LoU, without which it will not issue any loans to the borrower.

  Of course, this will not suffice in stopping fraudulent activities done by Bank officials. However, it will definitely help in adding real-time accountability with no scope of an alteration to the original document once it is issued.

“Online identity and reputation will be decentralized. We will own the data that belongs to us.”