Of course, the miner can try to cheat the system by colluding with me. But an attempt to spend the same bitcoins twice will be immediately exposed, and other miners will refuse to update the blockchain. Thus, a malicious miner will spend resources on solving the problem, but will not receive a reward. Due to the complexity of the problem, the costs of solving it are high enough for that, so it is much more profitable for miners to adhere to the rules.

Alas, this mechanism is highly ineffective. And it would be much easier if data management could be entrusted to a third party (for example, a bank). But this is exactly what Satoshi Nakamoto, the notorious inventor of bitcoin, wanted to avoid. He considered banks to be a universal evil. After all, they can freeze or withdraw money from your account at any time. This is why he came up with Bitcoin.

And bitcoin works. The cryptocurrency ecosystem is growing and developing: according to the latest count, the number of digital currencies has exceeded 1,855 (as of February 2020, there are already more than 5,000 of them – approx. Transl.).

But at the same time, it cannot be said that bitcoin is a runaway success. Only a small percentage of stores accept digital currency, and for good reason. First of all, the payments themselves are very slow (sometimes the payment takes 9 minutes, but there were times when the transaction lasted 9 days!). The payment mechanism is very expensive (try it yourself – it is much easier to open a hard blister with scissors). And finally, the price of bitcoin itself is extremely volatile (it rose to € 17,000, fell to € 3000, then jumped to € 10,000 again …).

But worst of all, we are still far from the decentralized utopia that Nakamoto so dreamed of, namely the elimination of unnecessary “trusted” intermediaries. Ironically, there are only three mining pools (a mining pool is a large-scale concentration of mining computers located somewhere in Alaska or elsewhere far beyond the Arctic Circle), which are responsible for generating more than half of new bitcoins * (and, accordingly , for checking transactions).

The post What is this task? appeared first on Opiria Blockchain .

At its core, blockchain is a well-known spreadsheet (imagine Excel with a single spreadsheet). In other words, this is a new way of storing data. Traditional databases usually have one user responsible for it. It is he who decides who has access to the data and who can enter, edit and delete it. With blockchain, everything is different. No one is responsible for anything, and no one can change or delete data. They can only be entered and viewed.

Bitcoin is the first, most famous and perhaps the only use of blockchain. This digital currency allows you to transfer money from point A to point B without the participation of a bank.

How does he work? Imagine that you need to transfer some amount of money from Jesse to James. Banks are good at this. For example, I ask the bank to send money to James. The bank starts the necessary checks: is there enough money in the account? Is there an account with the specified number? And in his own database he writes something like “transfer money from Jesse to James.”

In the case of Bitcoin, things are a little more complicated. You publicly declare in a kind of giant chat: “Transfer one bitcoin from Jesse to James!” Then there are users (miners) who collect transactions into small blocks.

To add these blocks with transactions to a public blockchain ledger, miners have to solve a difficult problem (they need to guess a very large number from a very extensive list of numbers). This task usually takes about 10 minutes to complete. If the time to search for an answer is steadily decreasing (for example, miners are switching to more powerful hardware), the complexity of the task automatically increases.

Once the answer is found, the miner adds transactions to the latest version of the blockchain – the one that is stored locally with him. And the message goes to the chat: “I solved the problem, look!”. Anyone can check and make sure that the solution is correct. After that, everyone updates their local versions of the blockchain. Voila! The transaction is complete. The miner receives bitcoins as a reward for his work.

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“Seven hundred blockchains! He shouts to his listeners. Pointing to people in the room: – Machine learning … – and then loudly: – Energetic turn! Healthcare! Public safety and law enforcement! The future of the pension system! “

Congratulations, we are at Blockchaingers Hackathon 2018 in Groningen, The Netherlands (thankfully, a video has survived). If the speakers are to be believed, history is made here. Earlier, the voice from the accompanying video asked the audience: can they imagine that right here, right now, in this room, they will find a solution that will change “billions of lives”? And with these words, the Earth on the screen explodes with a beam of light rays.

Then the Dutch interior minister Raymond Knops appears, dressed in the latest techie fashion – a black sweatshirt. He is here in the role of “super-accelerator” (whatever that means). “Everyone feels that blockchain is going to revolutionize governance,” says Knops.

In recent years, I have been hearing about blockchain all the time. However, like all of us. Because he is everywhere.

And I’m clearly not the only one wondering: who will explain to me what it is all about? And what is its “revolutionary spirit”? What problem does it solve?

Actually, that’s why I decided to write this article. I can tell right away: this is a strange journey to nowhere. I have never in my life come across such an abundance of jargon that describes so little. I have never seen such an amount of bombast that was blown away so quickly upon closer examination. And I have never seen so many people looking for a problem for their “solution”.

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“All we knew was that the blockchain was on its way and global changes awaited us,” one of the city officials said in an interview with the news weekly. “We had a choice: sit back or act.”

The residents of Zuidhorn decided to act. It was decided to “transfer to blockchain” the municipal program to help children from low-income families. To do this, the municipality attracted a student and blockchain enthusiast Maarten Veldhuijs for an internship.

His first task was to explain what blockchain is. When I asked him a similar question, he said that this is “a kind of system that cannot be stopped”, “a force of nature”, if you will, or rather, “a decentralized consensus algorithm.” “Okay, it’s hard to explain,” he finally admitted. “I told the authorities: ‘I’d rather make an application for you, and then everything will become clear.’

No sooner said than done.

The assistance program allows low-income families to rent a bicycle, go to the theater or cinema at the expense of the city, etc. In the past, they had to collect a bunch of papers and receipts. But Velthuijs’ app changed everything: now it is enough to scan the code – you get a bike, and the business owner gets money.

Suddenly, the tiny town became one of the “centers of the global blockchain revolution.” Media attention and even accolades followed: the city won the City Innovation Award and was nominated for Best IT Project and Best Civil Service.

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