Blockchain - Ultimate Beginner’s Guide to Blockchain Technology, Cryptocurrency, Smart Contracts, Distributed Ledger, Fintech and Decentralized Applications

Introduction

CONGRATULATIONS ON downloading Blockchain: Ultimate Beginner’s Guide to Blockchain Technology – Cryptocurrency, Smart Contracts, Distributed Ledger, Fintech and Decentralized Applications and thank you for doing so. While you might not yet be familiar with blockchain technology, you have almost certainly heard of the investment craze that it is responsible for. Without blockchain technology, there would be no Bitcoin or any of the other thousand cryptocurrencies that are currently driving investors of all stripes wild. Blockchain’s potential extends far beyond just investing in new cryptocurrencies, however, which is why you need this book if you hope to learn enough about the technology in question to put it to work for you.

Inside you will find everything you need to know about the basics of blockchain technology to determine the best way to move forward for you or your company to put yourself in place to take advantage of the technology that is already being called the most significant technological advancement since the creation of the internet. It doesn’t matter if you are interested in starting a new business or looking for a means of reinvigorating one that is beginning the flag, blockchain technology has something for you.

Blockchain technology is going to offer up new ways of looking at old problems for transferring money between parties, keeping track of files, automating contracts, counting votes, the list goes on and on. What it does at its heart, however, is using its unique blend of security and transparency to offer up a way for people to trust one another online without the help of a third party. While the exact results of what this unprecedented level of trust is going to be are not yet clear, what is clear is that for now at least, people at all levels of the supply chain can’t get enough of it. This also means profit is in the air for those with the nose for it, and if you can’t smell it yet, then you need to read on to ensure you don’t sit on this opportunity any longer.

Chapter 1: What is Blockchain?

NOW, AT THE BEGINNING of 2018, it is highly unlikely that you haven’t heard the term blockchain thrown around from time to time. This was likely in connection to Bitcoin and its year-end 2017 run that saw a peak price of about $20,000. This in no way means you should understand what blockchain technology is or be able to describe it in detail; and indeed, less than half the population can accurately do just that. Likewise, the overall percentage of people that interact with blockchain technology on a regular basis remains at less than half that number. Nevertheless, the following chapters will reveal why it is already called one of the most important new technologies of the twenty-first century.

First things first, a blockchain is a sort of decentralized database that works as a financial ledger. Due to its unique construction, it is incredibly secure while at the same time allowing for a virtually unlimited number of users to interact with it over time. As you may have guessed from the name, a blockchain is made up of individual blocks that each contains unique transaction information, as well as additional information relating to their specific location within the chain. A useful analogy is that a blockchain can be thought of as A Lego in that each blockchain is made up of many different parts, assembled in different ways while still falling under the same general construct.

When a transaction takes place on a blockchain, it is verified by a third party before being placed in a block with other transactions that took place in the range of a single node. When the new block is full, it is then verified by an independent third party in a process known as mining before it finds its way into the blockchain, its information is then shared between all the various nodes that are running the blockchain at a given time. If at least 51 percent of all the nodes don’t agree with the new information, it is then not allowed into the blockchain proper.

All of this happens autonomously based on the code the blockchain is constructed from. Nodes transfer their data between one another using an ease of use model which means that it automatically moves from one node to the next closest node, and so on and so forth until the new block has been added to all of the currently active nodes. From a security standpoint, the way the blockchain is constructed means that to create fraudulent blocks, the fraudsters would need to create enough nodes that they constituted more than 51 percent of the whole. The cost required for such an undertaking means that it would always exceed the reward, which, in turn, means that it is unlikely that anyone will be using this means to hack blockchains anytime soon.

What’s more, when a block is added to the blockchain, the block itself, along with all of its transactions, are given timestamps which means it is easy for users to determine precisely when a particular transaction takes place. Altogether, this process means that each blockchain can operate in a completely autonomous fashion, with transactions being passed to blocks, being passed to the blockchain, and being policed for errors without any guiding hand having a say in any part of the process.

Chapter 2: How Does the Blockchain Technology Work – In Plain Words

IF YOU ARE STILL CONFUSED by the core concept of what a blockchain is exactly, try this on for size:

A person (the node) has a spreadsheet full of their financial transactions (the blockchain). This spreadsheet is shared among several people (miners) which makes it distributed. When the person goes to add a new transaction to the spreadsheet, the other people are alerted to the fact, so they can double check everything is on the level before it is added to the spreadsheet.

The first person to verify that the funds exist to pay for the transaction are paid for their time (mining rewards). The verification that the transaction is legitimate (the proof of work) is sent along to show everyone else that things are as they should be. Assuming 51 percent of the people agree with the verification, the transaction is added to the spreadsheet.

If you are still slightly confused, don’t worry, several of the concepts involved are somewhat ephemeral, especially if you haven’t been