The main features of blockchain technology — Part Two
One of the interesting concepts misunderstood in the blockchain is “transparency”. Some people say blockchain gives you privacy, while others say it is transparent. Why do you think this is happening?
Well … a person’s identity is hidden through complex encryption and is only revealed by his public address. Therefore, if you search for personal transaction history, you will not see the message “Ali sent a bitcoin”, instead you will see the message “1MF1bhsFLkBzzz9vpFYEmvwT2TbyCt7NZJ 1 BTC sent”.
Therefore, despite the fact that the real identity of the person is secure, you will still see all the transactions made by his public address. This level of transparency has never existed within a financial system. This technology adds to the network the extra and much-needed level of responsibility that large organizations need.
Simply in terms of cryptocurrency, if you know the public address of one of the major companies, you can search it in a browser and look at all the transactions or transactions they have made. This forces them to be honest, something they have never encountered before.
However, this advantage is not the best use of blockchain. We are absolutely certain that most of these companies do not trade in cryptocurrencies, and even if they do, not all of them will trade in cryptocurrencies. But what if blockchain is integrated into their supply chain?
Now you understand why such a thing can be so useful for the financial industry?
Immutability in the content of the blockchain means that once something is entered into the blockchain, it cannot be manipulated. Can you imagine how valuable this benefit would be for financial institutions?
Imagine how much embezzlement and fraud would be reduced if people knew that it was not possible to change and manipulate corporate accounts. The reason why blockchain has such an advantage is to use the cryptographic hash function. Simply put, a hash means grabbing an input string of any length and giving an output a fixed length. In the case of cryptocurrencies such as bitcoin, transactions are considered as input and are executed through a hash algorithm (Bitcoin uses SHA-256) that has a fixed-length output.
Let’s see what the hashing process is like. We are going to import certain inputs. For this exercise, we use the SHA-256 hash algorithm.
In the next part of the article, we will learn more about the hash algorithm.