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@@ -18,15 +18,15 @@ Bitcoin's aim was to provide a digital currency system that did not rely on a ce
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Blockchain, the collection of techniques that solves the double-spending problem(((double-spending))), also provides a way of creating digital systems that can execute code in a decentralized manner, where no single administrator, company, entity, owner, or other centralized party has control over the digital system upon which that code executes. Similar to how various software applications can be downloaded and run on computers to allow them to be used for many different tasks, code can be uploaded to a blockchain and run in a decentralized manner for many different purposes. Programs that are uploaded to a blockchain for decentralized execution are called smart contracts or on-chain code/scripts (we’ll cover them in more detail later).
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Since smart contracts execute on a blockchain, this means that code can be executed in a manner that is tamper-proof and provides guarantees to all users that the system will do exactly what that code is written to do, without anyone having the ability to tamper with the system--including its code and associated data. Smart contracts allow blockchains to be used for much more than just sending and receiving digital currency. This use-case alone can bring positive change to many, through the democratization of and access to financial services to anyone with an internet-connected digital device (5 billion people at the time of writing), including 600 million people who are unbanked. But it is not just about financial services. Other applications are being proposed such as decentralized property registries. Such systems would ensure that individuals cannot lose their property just because a paper goes missing, or a database record is deleted.
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Since smart contracts execute on a blockchain, this means that code can be executed in a manner that is tamper-proof and provides guarantees to all users that the system will do exactly what that code is written to do, without anyone having the ability to tamper with the system—including its code and associated data. Smart contracts allow blockchains to be used for much more than just sending and receiving digital currency. This use-case alone can bring positive change to many, through the democratization of and access to financial services to anyone with an internet-connected digital device (5 billion people at the time of writing), including 600 million people who are unbanked. But it is not just about financial services. Other applications are being proposed such as decentralized property registries. Such systems would ensure that individuals cannot lose their property just because a paper goes missing, or a database record is deleted.
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Other notable use-cases that blockchain is facilitating progress in include:
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* **Supply chain management** -- by enabling transparent tracking of goods from origin to consumer, thereby enhancing trust and efficiency
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* **Digital identity solutions** -- by empowering individuals to have control over their personal data
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* **Digital communities** -- by ensuring that decisions are made in a transparent and open manner, and by allowing automated actions to follow community decisions.
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* **Supply chain management** — by enabling transparent tracking of goods from origin to consumer, thereby enhancing trust and efficiency
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* **Digital identity solutions** — by empowering individuals to have control over their personal data
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* **Digital communities** — by ensuring that decisions are made in a transparent and open manner, and by allowing automated actions to follow community decisions.
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Being decentralized, blockchain promotes openness and transparency, yet also privacy--achieved through cryptography(((cryptography))) (which is a building block of cryptocurrencies, as the name implies). Personal details are not required for sending and receiving funds or to interact with other blockchain-based processes. At the same time, anonymous business relationships can be built and promises can be guaranteed and automated through code. For example, investors who back a project could be guaranteed to receive a percentage of income generated. Payments to backers could start automatically once the smart contract receives incoming revenues, without human intervention--all while preserving privacy.
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Being decentralized, blockchain promotes openness and transparency, yet also privacy—achieved through cryptography(((cryptography))) (which is a building block of cryptocurrencies, as the name implies). Personal details are not required for sending and receiving funds or to interact with other blockchain-based processes. At the same time, anonymous business relationships can be built and promises can be guaranteed and automated through code. For example, investors who back a project could be guaranteed to receive a percentage of income generated. Payments to backers could start automatically once the smart contract receives incoming revenues, without human intervention—all while preserving privacy.
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=== Overview of a blockchain system
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* **Nodes** are computers and other computational devices that work together across the internet to keep the blockchain intact. They ensure that the rules of the blockchain system are not violated, so, for example, a user cannot spend more cryptocurrency than they have.
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* **Smart contracts** allow blockchains to be used for much more than just transferring cryptocurrency. In a similar way to software applications on traditional computers, developers (and users) can write and run smart contracts on the blockchain as they deem necessary.
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The blockchain can be seen as an append-only ledger where new transactions, such as transfers and any interaction with smart contracts, are stored permanently and cannot be changed--they are immutable. At the same time, the blockchain must ensure that certain rules are upheld to ensure integrity of the ledger. Such rules typically include:
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The blockchain can be seen as an append-only ledger where new transactions, such as transfers and any interaction with smart contracts, are stored permanently and cannot be changed—they are immutable. At the same time, the blockchain must ensure that certain rules are upheld to ensure integrity of the ledger. Such rules typically include:
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* no one can spend more funds than they have
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* no one can spend another person’s funds (unless authorization had been granted)
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