Blockchain As A Decentralization Milestone In The Electronic Payment System
Blockchain As a Decentralization Milestone . In the long history of the electronic payment system , although Bitcoin is not the first in the electronic payment system, it has had enough electronic payment systems failing in the past to try to achieve decentralization.
Bitcoin then appears as a differentiator. Because of its ability to realize the decentralization with Blockchain. And in fact, Blockchain technology is capable of doing so. Even far beyond the achievements of other digital currencies before. Blockchain can eventually be used as a way to decentralize things.
Because the capability can indeed be tested, it can be scientifically studied. This is often considered to be a great potential for the future. But in the middle of the journey, Bitcoin and the technology is also often encountered a cross opinion. Of course, because with this decentralization, it will indirectly relate to a system or other centralized institution. In this case can also relate also with stocks, bonds, commodities or anything else.
However, scientifically Blockchain is indeed able to do that. Blockchain can handle and control ” ownership “, using the Smart Contract . This is also the reason this Blockchain can pave the way, decentralize a property. Originally the smart contract derived from ideas and ideas ever found by Nick Szabo in 1997. At that time, he published a paper entitled ” The idea of smart contract s “.
Below, there are some examples of how Blockchain Bitcoin can be a bridge, to decentralize a few things. Similar to the handling or control of ownership of such property as in the use of smart contract . Then in Bitcoin, one that is similar to a smart contract and used to control ownership is called Smart Property .
Smart Property used to control this ownership may include physical property properties such as a car, home, smartphone, land, or otherwise. Of course Smart Property is not only in physical objects, but also includes non-physical properties such as shares in the company, remote computer access rights and also others.
Being able to control and handle property ownership both physical and non physical, then in the end the Smart Property can be exchanged and traded. Even able to minimize the lack of trust between property ownership from one person to another. So this will certainly be able to reduce the occurrence of fraud.
Example And Analogy
For example in a modern car has two main locking mechanisms:
- The owner can lock the car door physically, and an immobilizer . So it can prevent car theft if there is someone who turn on the machine.
- Car owners can use a key that can be run through wireless. So that key can authorize locking the door, and lock the machine. Usually this Key can be accessed only by pressing a button.
Miraculously, such security mechanisms can also be done in cryptography. So in the example to protect from car theft above can be done. Usually the algorithm used as a cryptographic key is symmetrical. However, it can also use digital signature schemes such as ECDSA based on asymmetric cryptography.
In the example above, let’s say the car has kept a copy of the public key. If a thief is about to try to unlock the door, and intend to start the car, then the car will send a series of challenges or problems at random. Then ask the thief to sign using a private key. So thieves will only be able to access, if and only if the thief can sign with the private key owned by the owner of the car. Only, to realize this and be able to work with real so quite difficult.
The second method that can be done to realize the example above is by way of hardcoded key directly by the manufacturer. So the car has a technical capability that continuously to reject the key used by thieves because it is not included in the hardcoded. In this case, the car can constantly receive new block sent with wireless from blockchain as well as inside Bitcoin. When a car is produced, the key for the first car user is added to the blockchain using a special transaction, and the car in the program with a transaction ID.
The above attempts, made if on the car there is a change of ownership. Then update the blockchain again to authorize the new transaction. So the new transaction that takes place, also uses the new transaction ID as an input. Then assign a new public key as its output.And it will be signed using a private key by the new owner of the car.
As a Safe Exchange Media
Suppose based on the example above, Nita has a luxury car. Then he wanted to sell the car to Rudi. Apparently Nita also can make the car sales it digitally. Call it, by way of selling his car, Nita can use it for the cost of education or for picnics abroad.
Of course it can be done by using internet connection. While Rudi, can pay the car owned by Nita is using Bitcoin. But of course this transaction can bring risk. If without using third party media. Because both Nita and Rudi, both have the potential to be absent from the obligation to run and complete the transaction.
In this case, as long as the currency to be used in the transaction is within the same blockchain, then between Nita and Rudi can make a single transaction. However, one single transaction simultaneously with the transfer of ownership of his car, as well as payments for the car.
Technically, in the transaction it will determine two inputs. One input is Nita ownership, and the second input is a payment made by Rudi. Then determine the two outputs as well, namely the car ownership to Rudi, and Rudi’s payment to Nita. The transaction, requiring both parties to sign both. If only one of the parties is signed, then the transaction becomes invalid.
If one of the parties has signed, then the transaction details can not be changed anymore.Once signed, then the transaction is broadcast to blockchain, and wait at least after 6 confirmation of the transaction. So that Rudi will get access after the transaction was successful. So at the same time, the payments made by Rudi to Nita will also be confirmed.And it can not happen without both.
But of course, the example above is just one example that can be done. To illustrate how Blockchain’s ability as a decentralized milestone. And also has the potential to decentralize in various protocols in the real world. Because basically, there is much more that can be done using this blockchain technology.