Initially, all blockchain wallets are anonymous. You can find out what amounts are stored in them without disclosing information about their owners. Of course, there are certain limitations – by “highlighting” a wallet on a website or in a public message, you can link your account to it, which will facilitate identification.
One of the first areas of human activity where technology was used. Blockchain wallet is an entry in a decentralized network. Its balance and related operations are contained in blocks that all participants have.
It is even safer than keeping money in a bank. If a hacker breaks into a bank server, he only needs to change one entry. To replace information about blockchain transactions, he will need to correct hundreds of thousands of records on different devices.
The cryptocurrency system is considered to be more honest and transparent than conventional finance. All network members see the amount of money in circulation and control Blockchain transactions. The likelihood of fraud and manipulation is minimized.
Large financial institutions initially considered blockchain and cryptocurrencies as direct competitors. However, since 2014, they began to massively introduce new technology. In this area, it is used at two levels:
- public blockchains control the transactions of ordinary users;
- private blockchains keep track of interbank transactions. They represent a consortium (association) of banks connected by common agreements. For a transaction to be considered genuine, it must be confirmed by the majority of participants, for example, 10 out of 12 banks.
Banks are also massively using blockchain for smart contracts. Unlike ordinary contracts, they are executed automatically when a certain mathematical condition is met.
For example, there is a transfer of 100 thousand dollars with the accumulation of an amount of 1 million.
One of the first projects was the US elections based on the blockchain. Distributed networks have made remote voting possible – voice substitution is virtually impossible in them.
And if you consider that the facial recognition system served as an additional layer of security, then such a process deserves even more credibility than the counting of ballots.
Blockchain technologies have been adopted by Estonia. It has developed an e-citizenship system that allows you to confirm your resident status from anywhere in the world. Thanks to this, Tallinn has become one of the IT capitals of Europe.
Romania is already exploring the possibility of transferring all identity cards to the blockchain. If the experts give a positive opinion, this decision will affect passports, driver’s licenses, student cards and other documents.
The positive effect of the elimination of passport offices and other bureaucratic institutions will be measured in hundreds of millions of dollars.
As we said above, one of the first blockchains in the world was designed to verify the authenticity of scientific publications. The system still works today – it helps to resolve disputes about the primacy of research, plagiarism and authorship.
The blockchain principle has been useful to universities in other industries as well. Distributed networks take over the administrative work – they check the received documents and homework, confirm the authenticity of certificates, transcripts and patents.
The most promising branch of technology use. Using the blockchain, you can create a unique key for authentication, which will be confirmed by all network users. The substitution will quickly open, which will allow the system to immediately respond to an intrusion attempt.
This applies to both blockchain wallets and other systems – banking, educational, government and corporate. According to experts, the mass introduction of technology will reduce the likelihood of hacking by 70-85%.
Since each participant in the network keeps his own copy of the data array, it is almost impossible to completely delete the information. This reduces the recovery time of the system after an attack and reduces the likelihood of irreversible damage.
In 2017, the first phone call was made using the blockchain system. The XPhone does not connect to a specific mobile operator. Instead, it uses a distributed network to connect with the subscriber.
This connection method helps to maintain anonymity and protect against eavesdropping. In addition, it helps to bring the cost of communication services closer to the market level – in public networks, the billing process is as transparent as possible and does not obey the rules of monopolies.
If you play in 2022, then you probably know what “microtransactions” are. In simple words, this is a fee for the purchase of in-game items. For example, skins for characters and weapons, bonuses and amplifiers.
The right to own digital objects is confirmed using the blockchain. This item becomes a non-fungible token – NFT. It cannot be copied or stolen – the chain of blocks will break, and the system will automatically return to its original state.
Since microtransactions are very popular in some games, their developers even give out small amounts of cryptocurrencies for achievements and time spent in the virtual world! This mechanism is called Proof-of-Gaming, PoG.