What is blockchain and why is it needed?

In the minds of the average user, the word “blockchain” (“chain of blocks”) has become quite closely related to the term “bitcoin”, which is in two ways reflected in perception.

On the one hand, the popularity of Bitcoin is also of interest to the blockchain, on the other hand, in the mass consciousness, Bitcoin is often associated only with something negative, forbidden and subjected to prosecution by lawmakers. Like, why pay with Bitcoins when there is a whole zoo of electronic wallets and bank cards? Matter of course - to turn some dark affairs.

A blockchain is essentially just a tool with which you can store transaction data (database). But the tool itself cannot be obviously good or bad: with an ax, you can go and chop wood to warm up in winter and cook food, or you can take the same ax and reduce the population of money lenders in a single city. The tool is the same, the application and consequences are different.
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You can find a lot of applications, the main thing is that there is an analogue of a transaction or similar interaction, partnership between the parties. Therefore, bitcoin and lightcoin are working on the blockchain technology now, banks are actively looking at the blockchain (in the autumn of 2016, Bank of America and Microsoft announced the beginning of the development of the financial blockchain platform).

The very first real deal with real money also took place in the autumn of the same year - an Israeli startup (Wave), a British bank (Barclays) and an Irish manufacturer of milk (Ornua) held a letter of credit for $ 100,000. And if earlier the process would have taken a week or more due to bureaucracy and verification of all documents, then thanks to cryptography and automated verification everything took about four hours.

On December 21, 2016, Alfa-Bank and S7 conducted a letter of credit through the blockchain.

The Central Bank of the Russian Federation, together with major banks in the country, created the Masterchain platform, the goal is to increase the transparency and efficiency of existing financial systems.

And the EU Parliament, in principle, thought about the implementation of elections to public authorities with the help of the blockchain.

Given the scale of application and the level of players who have already begun to use technology in business, it is no longer possible to consider the blockchain as some kind of strange, suspicious innovation that everyone will forget about in a while.

Is it all safe?

The main advantages of using the blockchain are the transparency of the transactions performed and multiple copying of all these transactions in such a way that each participant in the process always has information about each step of all partners.

If you try to describe it more simply - imagine a large shared folder on FTP. You see all its contents (no hidden files), you can quickly see who uploaded files to which subfolders. What kind of files, when and for whom.

But at the same time everyone has different access to these files. Someone can only enjoy the view and view the list of files in each folder. And someone (the addressee of a particular file) can download the data for himself. And no one else can access the file - only the one to whom it was intended.

Or, for example, a large electronic wallet with open statistics. You can see that the account received 50,000 rubles from user A for user B. User B transferred them somewhere else in the system an hour later. At the same time, the users themselves, hiding behind A and B, can be both anonymous and fully identified - it depends on the platform itself and the purpose of its creation. All participants in the chain can observe the movement of funds, but only the user with the necessary rights will have access to the funds themselves (B). The rest in this case serve as observers.

This ensures a proper level of openness of the transaction - the entire chain of transactions is duplicated and stored in the same encrypted form for each participant, and it will not be possible to somehow forge it.

Blockchain is decentralized, there is no one common “command center”, hacking that will succeed in destroying all data about the transaction and its participants or changing them.

For example, if a transaction was carried out in which 100 people participated, this blockchain chain will remain working and available for viewing even if 99 computers of other participants are corrupted. Indeed, in fact, each link of the blockchain chain is a kind of full backup of all transactions of all the other participants to this link.

Hacking one of these computers will not affect the integrity of the data on the others (as well as on their change).

Blockchain now and in the future

It is quite possible that now is precisely the time when the technology is run-in live on very significant areas of public life, and soon we will see more and more projects and platforms using the blockchain. Already, banks are trying to actively implement this in their own countries (including to reduce operating expenses), more and more new players are appearing on the market, seeking to popularize the use of technology.

New projects on the blockchain will be based on its main advantages - openness, security, and security.

Therefore, the blockchain will be a good help for any services where users could worry about possible fraud or data integrity:

• micropayments
• Bank operations
• logistics
• jurisprudence
• the medicine

In just a few years, the blockchain has already gone from a novelty in the technological world to a tool that is beginning to be used by large banks, corporations and the state.

What only strengthens the confidence that in the future technology will reveal its potential even stronger.

Little about us

We have been participating in the development of the blockchain since 2011 (the foundation of BitFury ) and we will be happy to share with you the latest developments and news.

We started the first experiments using central and graphic processors for mining 6 years ago, in 2011, as part of various projects. A year later, it was decided to focus on one thing - BitFury. In 2014, mining was already deployed in 3 countries (Finland, Iceland, Georgia) on its own equipment. We plan to build a data center in the United States.

Several interesting projects that we have already managed to implement to the present moment:

28 nanometer technology chip

Came to replace our specialized 55-nanometer chip. The new chip worked with a consumption of 0.2 Joule per gigashash.

16 nanometer chip



We started to implement it in our own data centers. This chip has already consumed 0.06 Joule per gigaheesh, while the performance was 184 gigaheşa per second (immersion cooling) and 140 - with air.



The blockchain also offers great opportunities for government agencies - in the spring of 2016, we began work on a blockchain-based land cadastre project for Georgia. Apart from the fact that the use of the blockchain will increase the level of security and greatly speed up the process of remote registration of documents, this should also reduce the cost of registering rights to land, and quite significantly - from an average of $ 50-200 to 5-10 cents.

In 2014 and 2015, we managed to attract investments in three rounds of $ 20 million each, which at that time was about half of all global investments in the development of Bitcoin.

Today BitFury is one of the biggest miners and creators of the blockchain platform. We are going to continue to maintain leadership positions and actively promote blockchain technology.

If you have any specific questions about the blockchain in general or of any of our products in particular ( BlockBox , 16nm ASIC chip , blockchain and the state) - write in the comments, we will answer in the following posts.