Attempts to explain Bitcoin and cryptocurrencies generally generally focuses on how the two new forms of money as well as a challenge to the existing form of money.
Cryptocurrencies is novel because they are only possible because of the ready availability of high-speed computing and networking. They are a challenge for today’s currency because of their decentralized nature, take them out of the control of national governments. small signs that Bitcoin has filtered into popular imagination, including appearances in the US courtroom television drama The Good Wife, in an episode called “Bitcoin for Dummies”.
What has been given less attention is the mechanism that makes possible bitcoin network, such blockchain. To have and use bitcoin or other cryptocurrencies not require any knowledge of the workings of blockchain. However, this concept is relatively easy. It is best thought of as a great book full of every bitcoin transaction ever made, that each user has a copy of bitcoin are constantly updated as new transactions are made. Read more..
But this accounting analogy is something of a disadvantage; blockchain has so many potential uses other exchange value that should not be overlooked.
Foremost among them is a project to encourage the use of alternative Ethereum. Although also provide cryptocurrency own, ether – ether was sold 61m in sales opening this month, raising approximately US $ 15m – a project set to do much more.
Ethereum including programming languages, EtherScript, with which users can systematically set out the contract in the form of programmable – smart contract. when the contract is an example of intelligent digital rights management as included in some digital media files, which is a means of enforcing smart contract copyright license. Or software that automatically throttles network traffic into acceptable limits is an intelligent form of contract to deliver and enforce service level agreements between service providers and clients.
Ethereum intelligent contracts denoted in the form of a logic similar to that found in a typical contract, and programmed into blockchain, where they live, binding, self-enforcing and self-executing statement. The use blockchain means that every contract is distributed across the entire network with a trigger time agreed upon and written into the contract. As each contract is widely distributed there is no prospect of the dispute at a later date.
Some may recoil from this mixture cryptocurrency, programming languages and contract law, while others may see the appeal of safe and unbreakable contract written in a systematic and consistent in general (programming) language. Various controversial claims about Ethereum suggested it would remove the need for a lawyer, or even the need for the bankers.
Outside the digital money
Application is immediately obvious to Ethereum finance, so that the use of such new and gambling cryptocurrencies peer-to-peer is that they are regularly quoted. But the outlines of the legacy cryptocurrency Ethereum opening still wider application potential.
The Ethereum White Paper outlines the concepts and objectives of the project explains how to use the blockchain can be used to establish a decentralized autonomous organization (DAO). As a result, every business process that requires confidence and knowledge can be programmed into blockchain as smart contract so that it functions automatically and consistently when a small financial transaction injected into it to activate the contract.
By being DAO, organizations can benefit from sharing resources, including computing power. Distributed security firm place in the hands of the network rather than any individual. The principles of collective organization can also be boosted with the use of blockchain to potentially determine the outcome of the debate and discussion that is carried out systematically through the network.