Blockchain Surpasses Bitcoin, May Reshape Financial Landscape in the Next 40 Years

Blockchain technology is gradually changing the way the financial industry operates and its transaction models. Some believe that in the next 40 years, the influence of blockchain may surpass that of Bitcoin itself.

Bitcoin, as the earliest and most mature application of blockchain technology, has become well-known to the public. In recent years, the application of blockchain in other fields is continuously expanding, showcasing new business trends. Some predict that future systems based on blockchain may replace existing e-commerce platforms, with all e-commerce activities being built on blockchain. Some major e-commerce platforms have begun to explore the use of blockchain technology to combat counterfeit and substandard products. So, what are the characteristics of this highly regarded blockchain technology?

The main characteristics of Blockchain

• Information is immutable: Once the information in a block is recorded, it cannot be changed without affecting subsequent blocks, otherwise it will lead to a mismatch in digital signatures.

• Decentralization: The entire blockchain network is maintained collectively by all participating nodes, with no single central controlling authority.

• Digital currency trading: The trading process does not involve the exchange of actual currency, only the exchange and verification of data blocks between the sender and the receiver.

• No intermediary fees: Transactions are conducted directly between parties without the need to pay third-party fees.

• The coexistence of anonymity and openness: Transactions are conducted anonymously, but all transaction records are publicly available. Anyone can verify transactions through mining, significantly increasing transparency.

• Frequent verification: Every 10 minutes, transactions are verified through the mining process.

Important Terms in Blockchain Technology

1. Blockchain: A distributed digital ledger that records all past transaction information. It is a data structure linked by cryptographic hashes, stored in a decentralized network. All nodes in the network must reach a consensus on the order of transactions, and every 10 minutes, a computer is randomly selected to verify the transactions that occurred during that time.

2. Bitcoin: The first decentralized cryptocurrency in the world, invented in 2008. Its control is shared by all computers on the network, using cryptography to validate transactions. Bitcoin transactions create a series of transaction records.

3. Block: Transactions are merged into a single block, with a new 1MB block created every 10 minutes. Each block contains a timestamp, a reference to the previous block, a transaction summary, and proof of work.

4. Mining: Refers to the process of adding transaction records to the Blockchain ledger. Miners use complex hardware to perform mathematical calculations to verify transactions and place valid transactions into secure Blocks. Miners are rewarded for creating new Blocks and collect transaction fees.

5. Double spending: Refers to the act of sending the same Bitcoin transaction to two different recipients at the same time, which is a type of fraud that needs to be prevented.

6. Proof of Work (POW): A mechanism that requires performing complex calculations to facilitate transactions. A valid computational result proves that a certain amount of work has been completed.

7. Hashcash: A POW algorithm, which is the one used by Bitcoin. It is difficult to compute when generating data, but easy to verify.

8. Node: Participants in a distributed computer network, each node maintains a complete copy of the Blockchain. When new users join the network, they receive a copy of the Blockchain and access permissions.

9. Address: A string used to send, receive, or hold cryptocurrency. Bitcoin wallet holders need to disclose two cryptographic keys, the address and the private key, to confirm transactions.

10. Smart Contract: A digital protocol stored on the Blockchain that cannot be altered once signed. It defines certain logical operations that must be fulfilled to execute specific tasks.

Blockchain technology is continuously evolving, and its application scope is also expanding. As people gain a deeper understanding of this technology, we may see more innovative and groundbreaking applications emerging in various fields.