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Blockchain is an algorithm designed to manage anything measurable without centralized control. It allows the transfer of value without the need for trust or central authority.
It functions with a distributed data structure in which no one person, computer or institution controls the system. Users may access, inspect or add to the data, but they can’t change or delete it. The original information remains the same and leaves a permanent and public trail of transactions.
Bitcoin exists and functions on the blockchain.
It could be compared to systems of organisation used by ants and bees, in which no one member is the leader, but all members (peers) are biologically wired to act in a manner that ensures the survival of the system.
With Blockchain, computers and incorruptible software, are “technologically wired” to act in the interest of the system, not a single user. Blockchain is a peer network where quality and functionality are ensured by the nature of the system, not by any controlling authority.
Blockchain is what the name says, a chain of linked blocks, each containing information. By design, it is resistant to modification of the data it carries.
A block is like a page of a record book. Each time the block is “completed” or “filled”, it makes way for a new block. Once the data in a block is recorded, it cannot be changed without altering all subsequent blocks, and the cooperation of members of the network who also hold the block information. The blockchain contains an un-editable record of all transactions made.
Consumers demand fresh fruit
Producers and retailers have to ensure that this demand by consumers are met or their products won’t be bought. An integral part of maintaining freshness and quality is the cold chain.
The cold chain is a system of maintaining the temperature of perishable produce to ensure that it does not deteriorate before it reaches the consumer. Ensuring the maintenance of the cold chain, and proving that it has not been compromised, is a major headache for producers, transporters and retailers.
Blockchain solves the problem. Temperature sensors are placed inside the containers and continuously record the temperature.
Information is collected automatically, stored in the blockchain and, once the containers reach their destination and responsibility is transferred to the retailer, blockchain technology authorises payment. When blockchain authorises payment, it cannot be stopped by human intervention because the system executes the payment based on the fact that the requirements for payment have been met.
A network of computers acting as servers, called “nodes”, is the backbone of the blockchain. All the nodes that contain blocks related to the transport of the fresh produce in our example, then check whether all requirements have been met and allow payment to be made. Payment is made peer-to-peer, without the need for a third party such as a bank.
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Quick facts:
- Blockchain does not need trust
- Blockchain does not need central control
- The message that accompanies the instruction, forms part of your digital signature
- The balance in your account is not kept. Balance is proved by referring back to all previous transactions
- If you lose your personal key, you irretrievably lose your money