The purpose of this structure is to act as a public record of all approved transactions, stored in full on a peer-to-peer computer network to verify its accuracy on an ongoing basis. The blockchain also cannot be changed or modified, making it an indisputable and immutable reference point.
To illustrate how a blockchain works, here’s a step-by-step explanation of how each new block is added:
Step 1: Someone initiates a transaction.
Step 2: The transaction is sent off to a peer-to-peer (P2P) computer network. Each computer is called a “node.”
Step 3: The P2P network verifies the transaction based on the existing information that everyone shares. The verification is completed using an algorithm.
Step 4: Once all of the nodes are in agreement and the transaction is approved, a new block of information is created.
Step 5: The block is added to the record and is now an unalterable part of the existing blockchain.
Although I am in favor of blockchain for the book industry, I don’t necessarily feel the same way about the use of digital currency (also called cryptocurrency) for payments. There are certainly some tech-savvy readers out there that can jump through the hoops involved, but regular book buyers are not likely to be ready for the plunge.
It’s important to understand that, while the two are often mentioned in the same breath, cryptocurrency and blockchain are not one and the same. Cryptocurrency is one type of data that can be added to the blockchain, and blockchain technology is the storage system that contains said information. What inherently links them together is the fact that there was a time when Bitcoin, the initial crypto, was by far the most popular blockchain use case in the world. This application was ideal for recording any and all transactions being completed using digital currency, something that had never been done before. Plus, its hash system was the perfect way to maintain a degree of anonymity while still attributing each block to an individual transaction and owner.
Getting back to blockchain, its usage in the digital book industry can benefit everyone, from publishers to readers.
For publishers, blockchain can:
For retailers, blockchain can:
For readers, blockchain can:
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