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A brief introduction to storing data on the blockchain

Author:Hubi Date:2018-07-25 14:01:10

In 2013, a feature was introduced into the Bitcoin protocol that allowed us to: Create a special type of transaction (known as an OP_RETURN transaction) where you can embed 40 bytes of data into this transaction. Initially, it was used to add context information to Bitcoin transactions, such as shipping information. One way to use this feature more creatively is to create a minimal transaction (0.00000001, or a cong, plus transaction fees) and embed any suitable information you want.

Because blockchains do very well in terms of time stamps and distributed consensus (meaning that most nodes in the network agree that something is true - in the Bitcoin scenario, this information is the time of the transaction information and transaction) You can use the irreversibility of the information stored in the transaction to make a permanent record of something.

40 bytes is not much, but restrictions often stimulate creativity. One of the interesting applications of this feature is the Proof Of Existence. For any file, the presence proof service can create a hash for it - a unique ID, not the entire file, and then embed the hash into the blockchain. Later, you can use this transaction's timestamp and the hash stored in it to prove that the file exists at that time by comparing the hash stored in the blockchain with the hash of the file in your hand. If the two hashes match, then you have evidence that the file exists at the time of the transaction.

Another more user-centric application is Blocksign, a digital signature service similar to Docusign or Hellosign that uses the same technology to save signature files in the blockchain.

These two applications are interesting, but relatively speaking, OP_RETURN transactions are less important applications. Fortunately, all areas of development are thinking of smarter ways to make better use of these 40 bytes.