Shulou(Shulou.com)06/03 Report--

Quick introduction to Block chain (1)-- introduction to Block chain 1. Introduction to Block chain 1. Introduction to distributed Accounting Technology

In January 2009, Bitcoin network based on blockchain structure came out quietly, which combines important achievements such as modern cryptography and distributed network technology. In the years after the emergence of Bitcoin, the Bitcoin network steadily supported a large number of money transfer transactions in a pure distributed scenario, which proved that the block chain data structure well met the basic needs of distributed accounting. Distributed accounting technology based on block chain structure began to appear in large numbers.

As the cutting-edge achievements of information technology continue to integrate into the financial industry, distributed ledger technology (Distributed Ledger Technology,DLT) based on blockchain (Blockchain) has come to the fore and has been explored and landed in some scenarios (such as cross-border payments).

The core value of distributed ledger technology is to provide a credible basis for future multi-party collaborative networks. The evolution of bookkeeping technology caused by blockchain will lead to changes in business collaboration and organizational form.

2. Block chain terminology

There are three important concepts in the implementation of blockchain:

A, transaction (Transaction)

A transaction is an operation on the account book, resulting in a change in the status of the account book, such as adding a transfer record.

B, Block (Block)

The block is used to record all transactions and status results that have occurred over a period of time, which is a consensus on the current state of the books.

C, chain (Chain)

The chain is made up of blocks in series according to the order of occurrence, and it is a log record of the changes in the state of the entire account.

3. The realization principle of block chain.

The goal of blockchain is to implement a distributed data record book, which is only allowed to be added and not deleted. The basic structure of the bottom layer of the distributed ledger is a linear linked list, which is composed of blocks in series, and the Hash value of the leading block is recorded in the subsequent block. The legality of a block (and transactions within a block) can be quickly verified by calculating a hash. Nodes in the network can propose to add a new block, but they must go through a consensus mechanism to confirm the block.

4. The working process of Bitcoin blockchain

The blockchain of Bitcoin works as follows:

(1) the user initiates a transaction through the Bitcoin client, and the message is broadcast to the Bitcoin network for confirmation. The nodes in the network will package the received transaction requests waiting for confirmation and add information such as the hash value of the previous block header to form a block structure. Then, try to find a nonce string (random string) and put it in the block so that the hash result satisfies certain conditions (such as less than a certain value). The process of calculating the nonce string, commonly known as "mining". Finding nonce strings requires a certain amount of computational effort.

(2) once the node finds the nonce string that satisfies the condition, the block becomes legal in format and becomes a candidate block. The node broadcasts it in the network. After receiving the candidate block, other nodes verify and find that it is indeed legal, then admit that the block is a new legal block and add it to the local block chain structure maintained by themselves. When most of the nodes accept the block, it means that the block is accepted by the network, and the transactions included in the block are confirmed.

The working process of Bitcoin's blockchain can be simplified into two key processes, one is to complete the consensus on a batch of transactions (to create a legal blockchain structure), and the other is to add new chunks to the blockchain structure and be recognized by the network. make sure it can't be tampered with in the future.

Bitcoin's consensus mechanism based on arithmetic (finding nonce strings) is called workload proof (Proof of Work,PoW). Because in order to make the hash results meet certain conditions, there is no known fast heuristic algorithm, so we can only try to calculate the brute force of the nonce value one by one. The more times you try (the greater the workload), the greater the probability of calculation.

By adjusting the restrictions on hashing results, Bitcoin network control produces a legal block in an average of about 10 minutes. The node that calculates the block will receive the management fee for all transactions in the block and the fixed incentive fee issued by the agreement (halved every four years).

Bitcoin network is anyone can join, if there are malicious nodes in the network, can malicious operations be carried out to tamper with the records in the block chain, so as to destroy the entire Bitcoin network system. For example, deliberately do not recognize the legitimate candidate blocks generated by others or simply reject transaction requests from other nodes.

In fact, because there are a large number of maintenance nodes (estimated in thousands) in the Bitcoin network, and most of them are working properly, they only recognize the longest chain structure they have seen by default. As long as there is no more than half of the nodes in the network colluding in advance to take malicious action, the longest chain will most likely become the final legal chain. And as time goes on, the probability will become greater and greater. For example, after 6 chunks are generated, even if half of the nodes join together to subvert the confirmed result, the probability is only 1.6% of (1 ≈ 2) ^ 6 block, that is, the probability is less than 1 max 60. The probability will be reduced to less than 1/1000 after 10 blocks.

If most of the nodes in the whole network unite to do evil, it can cause the whole system to fail to work properly. It often means paying a high price, and the gain outweighs the gain compared with the gain from doing evil.

2. Characteristics of block chain 1. Technical characteristics of block chain

The technical characteristics of the block chain are as follows:

A. distributed fault tolerance

The distributed ledger network is extremely robust and can tolerate the abnormal state of some nodes.

B, unusurable modification

The data submitted by the consensus will always exist and cannot be destroyed or modified.

C, privacy protection

Cryptography ensures the privacy of data, even if the data is leaked, it cannot be parsed.

2. The business characteristics of block chain.

The business characteristics of the blockchain are as follows:

A, trustworthy and willful

Blockchain technology can provide a natural and reliable distributed ledger platform without the participation of additional third-party intermediaries.

B, reduce the cost

Compared with traditional technologies, blockchain technology may lead to faster transactions through automated contract execution while reducing maintenance costs.

C. Enhance security

Blockchain technology will facilitate safe and reliable audit management and accounting, and reduce the risk of crime.

3. The characteristics of distributed ledger technology.

The characteristics of distributed account books based on blockchain are as follows:

A. to maintain a growing chain, it is only possible to add records, and records cannot be tampered with once confirmed.

B, the consensus of non-centralization or multi-centralization, without centralized control, is as distributed as possible.

C, through the cryptographic mechanism to ensure that the transaction can not be denied and destroyed, and try to protect the privacy of user information and records.

3. Zone open chain application scenario 1. Brief introduction of block chain application scenario

Block chain technology has moved from simple technical discussion to the stage of application. There have been a large number of blockchain-related enterprises and teams at home and abroad, a small number of enterprises have combined with their own business to explore quite unique application scenarios, but more enterprises are still in the stage of continuous exploration and verification.

The appropriate application scenario of blockchain must be analyzed from the characteristics of blockchain technology itself. Block chain can provide the guarantee of decentralization, untamperability, security and reliability without the introduction of third-party intermediaries. Therefore, all activities that directly or indirectly rely on third-party guarantee agencies can benefit from blockchain technology. At present, the main application fields of blockchain concerned by investment are financial services, credit information and ownership management, resource sharing, trade management and so on.

2. Financial services

The potential advantages of blockchain include reducing transaction costs and reducing the risk of cross-organizational transactions. At present, the application of blockchain in the field of financial services has attracted the most attention, and many banks and financial trading institutions around the world are the main promoters. Some investment institutions are also using blockchain technology to reduce management costs and control risks. However, when introducing block chain technology, we should also pay attention to the problems and risks that may be caused.

3. Credit information and ownership management

Digital management of credit information and ownership is the dream of large social platforms and insurance companies. At present, the main technical problems in the field of credit information and ownership include the lack of sufficient data and analysis capabilities, the lack of reliable platform support and effective data integration management. Blockchain is considered to facilitate data trading and flow, providing secure and reliable support. The threshold of the credit industry is relatively high, which needs to be jointly promoted by various resources.

4. Resource sharing

Sharing economy companies, represented by Airbnb, will welcome decentralized applications that can reduce management costs. The theme in the field of resource sharing is relatively concentrated, and the design space is large, so it has received a lot of investment attention.

5. Trade management

Blockchain technology can help automate tedious procedures and processes in the field of international trade and logistics supply chains. The trade management scheme based on block chain design will bring great convenience to the participating enterprises. In addition, the digitization of sales and legal contracts in trade, goods monitoring and testing, real-time payment and other directions may become breakthroughs for start-ups.

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