If you have not heard about blockchain, you will soon understand what it is.

It is a technological
database that is based on a cryptographically secured distributed ledger. This ledger is secure
and transparent, and it ensures that the information on it is irrefutable, and it all copies update.
Anyone could add to it, but no one would be able to delete anything. This is ideal when record
keeping without a central mediator is needed.

Blockchain, also known as Distributed Ledger Technology (DLT), was the

technology buzzword of 2016. This technology has been around since 2008.
It underpins the digital cryptocurrency, Bitcoin, and was conceptualized as a
solution to the problem of securing a database and removing the
requirement for a trusted administrator.

Nick Revych shows the new principles of distributed databases and the architecture behind it.
He will describe the plan for implementation, and he will tell the advantages and benefits that
this new technology brought to the world.

Key Concepts

Blockchain technology description.

Areas where distributed application are demanded.

How this new technology can be implemented.

Differences between classical and new distributed encrypted approach.

Benefits from the implementation blockchain.

What is blockchain and peer-to-peer technology?

BLOCKCHAIN is a data structure that creates a digital ledger of transactions and allows it to
be shared among a distributed network of computers. It uses cryptography that allows each
participant to securely manipulate the ledger without the need for a central authority.
PEER-TO-PEER this is a method of transmitting data directly between participants in the
environment without resorting to a mediator with a high degree of protection. It is a striking
example of this technology.
An electronic system based on cryptographic proof is necessary instead of the trust. It allows
any two willing parties to directly create this transaction with each other without the need for a
trusted third party. In order to protect a sender from fraud and routine escrow mechanisms,
there are transactions that are computationally impractical to reverse, and they can be easily
implemented to protect the receiver.

The steps to run the system are as follows:

1) New transactions are broadcast to all peers

2) Each node collects new transactions into a block

3) Each node works on finding a hash for its block

4) When a node finds a hash, it broadcasts the block to all nodes

5) Peers accept the block only if all transactions in it are valid and not already spent

6) Peers express their acceptance of the block by working on creating the next block in the

chain, using the hash of the accepted block as the previous hash
In order to get into the hash, a timestamp must prove that the data existed at the time. Each
timestamp includes the previous timestamp in its hash, which forms a chain with each
additional timestamp reinforcing the ones before it. There is a chain of blocks structure below:

We define an electronic distributed ledger as a chain of digital signatures. Each owner transfers
the chain to the next by digitally signing a hash of the previous transaction and the public key of
the next owner and adding these to the end of the chain. A payee can verify the signatures to
verify the chain of ownership as showed below.
Blockchain technology: consensus
For Bitcoin timestamp, network implemented the proof-of-work (POW) by incrementing a nonce
in the block until a value is found that gives the blocks hash the required zero bits. Miners are
people with resources that are doing work, and they take commission for their work.
Businesses that receive frequent transactions will probably want to run their own peers for
more independent security and quicker verification. So, now, participants think about to
implement other types of consensus, such as proof of stage (POS); ARBC (Asynchronous
Randomized Byzantine Consensus); BAR (Byzantine altruistic rational); SCP Quorum Slicing etc.

Blockchain technology: Comparison

The classic approach involves working with a

central database and its administrators. All system users enter their data into a single
information center. There are some disadvantages to this accord. For example, corruption risks,
the possibility manipulation of information, a single point of failure is not available to integrate
additional services.
 BLOCKCHAIN-Solution creates a distributed
database, and all users have a copy. Inputs are anonymous and independent, protected from
deletion, and their correctness is confirmed by complex mathematical algorithms of the system
without central control.

Projects that can be based on Blockchain technology:

Ministry of Finance: Tax Administration

 Ministry of Justice: Monitoring of electronic declarations

Ministry of Health: Medical records, diagnoses, medications

Agriculture Ministry: Land Registries

Ministry of Economy: The register of investors and donors (CRM)

Ministry of Infrastructure: Civil servants structure

Ministry of Social Policy: Subsidies, orphans

Election: Voting results in real time

Blockchain technology implementation:

Registries distributed by technologies have the potential to help the government in areas, such
as:

collection of taxes

distribution of benefits

issuing passports

land registries

ensure the supply of goods

ensure the integrity of public records and services

in healthcare technology has the potential to improve the overall quality of services
provided, certifying the fact of their provision, and providing secure access to records
according to certain rules

IBM is implementing the technology for digital contracts

Microsoft has launched a technology project blockchain Azure: Blockchain as a Service

(BaaS)

More than 30 of the largest banks in the world adapt technology to their needs
Areas of Implementation
 Open government these freely available to all in real-time, connected into a single
environment, and taking into account the display, in which the records are created by
the citizens and officials, without the intermediary bodies

Accounting for property, movable and immovable accounting for any property,
even cell phone numbers is easily accomplished without intermediaries by the owners
of the property they just create a record sale, exchange, donation, etc., sign them
digitally signed and stored in a shared environment, taking into account

Voting and Elections in addition to the property (shares of companies) medium

allows the automatic counting of votes during there quotas in the capital without needs
to attract a notary or a trusted third party.

Accounting for Legal Entities registers, funds accounting, reporting who the director,
who is the owner, who is the beneficiary who is an accountant who has what authority
in the company all of this can be taken into account on the basis of records created by
members of the environment without intermediaries and state agencies in clear text
in real-time.

Advantages of the technology

Equality of rights: validation members have equal rights and the environment are
taken by all the rules, which are simple and democratic

Distributed: decentralized and demonopolized data is stored in a distributed

environment.

Protection: information encrypted inside.

Stealthiness: personal information is not available without the proper key.

Profitable: distributed applications allow them connect more services providers and
reduce the cost.

Availability: peoples have more availability to get information and services.

Integrality: a clear data structure allows you to integrate information with different
systems.

Confirmation : it is easy to carry a certificate of electronic signatures.

Universalism: the technology can be used in any areas to distribute information.

Efficiency: systems and services based on blockchain are more effective than
traditional databases.
 Stability: the database stores for all participants, so is not possible to destroy or falsify
the data

BLOCKCHAIN TECHNOLOGY: CONCLUSIONS

System created by blockchain technology have good commercial basis, a large range of
applications and access to Western markets.

Technology is securely protected. Her protocols are checked in the banking sector by
years.

The solution meets all the requirements of information security and personal data
protection

Technology spreads rapidly around the world. It demands in many aspects of life.

Based blockchain-technology system is easily integrated with BI-products and you can
get a very convenient analytical system according to specified parameters.

Systems based on this technology can be flexibly configured and can be expanded with
additional services.