TCP/IP and the Block Chain
Vint Cerf and Robert Kahn had a brainwave back in 1974 and 1975; they invented something which was an extraordinary breakthrough: the TCP/IP Internet network protocol.
It works in the same way as we expect some fixed or standard responses to our statements in our daily communication. Take, for example, that someone says ‘Have a nice day’, that person would expect a ‘You too’ answer, although there are no strict rules for this. Thus, TCP/IP protocol was conceived to allow any computer to be connected and communicate with the ARPANET. The project grew from that moment, moving from the ARPANET to provide connection amongst computers, achieving eventually what we all know nowadays as the Internet of Everything.
Although the IP and TCP technologies have not changed as much. The IP address works currently in the same way as it has always functioned, still serving as the identification of any tablet, computer or smartphone on the Internet. Besides, the TCP technology separates the packages of data into segments so that they can be submitted. Both the IP and TCP work together in order to improve the probability of data packages delivery.
Tim Berners-Lee was influenced by these technologies and later, he created the Hyper Text Transfer Protocol, although we usually use the acronym HTTP. It developed into the way of communication among Web Servers. Nowadays, we have a variety of protocols available to work within the network, such as DNS and ARP. A wide range of devices and different technologies have evolved from these creations; search engines, websites, email services and Internet Services as SaaS, IaaS or PaaS serve as examples of the development into digital economy. The Block Chain protocol is producing the same change and innovation as TCP/IP caused back in their days. Some people even state that the case of Block Chain is comparable and as remarkable as the origin of the Internet.
How the functioning of Bitcoin works? These networks are decentralised. Their job is to verify and validate every transaction that the members of the network have carried out in order to guarantee that all transactions have been made between individual accounts within the network and also to ensure that no double-spending has taken place.
There are some members in the network who are in charge of verifying and validating the transactions are referred as miners. They carry out their tasks by means of specialised software which is combined with the function of processing data with computers so as to check out transactions. Although the miners’ job may seem easy, processing data for this purpose requires powerful computers and bandwidth and a high consume of electricity; purpose for which miners use their own resources and they need to be paid off.
The miners create blocks of transactions every few minutes. These blocks of transactions are organised with files containing all the information about the transactions that have been carried out in the in the network during the previous minutes. The most important concept at this point is to verify that every transaction has taken place only between two individual accounts so as to guarantee that no double-spending has occurred.
Since, as it has been mentioned before, miners use their own resources, in order to pay off their endeavours, they receive Bitcoins. However, there is a finite number of Bitcoins that can ever exist: 21 million, no more. Due to the fact that the reward is limited, that is why these individuals are called “miners”; they work with their powerful computers to get their reward out of the limited currency available.
The term chain refers to the way in which blocks are grouped. Each block of transactions is tied to the previous one in time; that is why the result of the grouped transactions is called Block Chain. Every part of this process is ruled by the Block Chain protocol, an algorithm responsible for the creation of this cryptocurrency: the Bitcoin.
There lies the difference between the TCP/IP protocol which was explained above and the Block Chain protocol, being the first based on communication and the second on value-exchange protocol.