Blockchain Technology

 

Why Blockchain?

There are a handful of problematic assertions that we can overcome with a distributed consensus method instead of a traditional central system.

Let me introduce a few blockchain-related applications:

Think about an auction where participants put bets on artifacts, the winner then pays the price and gets the artifacts. However, if we attempt to conduct the same auction on an internet platform, then there will be issues with trust. What happens if one of the participants is the winner of the bet, claiming 10000$ but when the payment is made the person doesn't reply.

It is possible to handle these events effortlessly with blockchain. In the course of betting the amount of a token is deducted from a bank account and be saved inside the smart contract (business logic code running in Ethereum). Bid transactions make use of private keys to sign transactions. This way you can't revert to claim that the transactions did not occur.

Another easy and amazing idea we can create using Ethereum can be online-based games, such as Tic-tac-toe. In this game, both players deposit Xamount into the contract. Every move performed by a player is recorded on the blockchain (each move is digitally signed) and the the smart contract's logic can confirm each time a player moves. At the end of the day the smart contract decides who is the winner. The winner will be able to claim the prize.

How do you define blockchain? What is it that makes it so crucial?

Imagine a scenario where you could transfer money directly to a person who does not have banks in mere minutes instead of days and you don't need to pay outrageous bank charges. or one that stores funds in an online wallet that is not linked to a bank which means you are your own bank, and you have the complete control of your money. It doesn't require bank authorization to access or transfer it, and don't need to be worried about a third party taking it from you, or the state's economic policy changing it.

This isn't a realm that is in the future, it is a reality that a large but increasing number of early adopters reside in today. This is just some of the most significant blockchain-related applications that are changing the way we believe and transfer value. We'll explore the rest in the future.

However, for many blockchain technology remains an unknown or intimidating subject. Many are even skeptical about whether blockchain technology will be used in the near future. The skepticism we're seeing today is normal since we're relatively new to the advancement and widespread use of blockchain technology.

2021 will be an event in blockchain that is similar to what last decade was to internet. Like the internet blockchain technology is anything not a trend, it's in the future and if you're here, then you're in the early days too.

This article delves into the world of blockchain technology. This is the 'introductory for blockchain tech 101'. An entire, simple-to-understand step-by-step beginner blockchain explanation. Learn everything from the basics of what is blockchain and why it's important, to how blockchain functions (step through the steps) and what the current - the most exciting blockchain-related apps could be.

You'll walk away from this article confident and on the right path to making educated, independent Blockchain technology investment decisions. You'll also be a pro when you're looking to be able to be a part of conversations with friends and family as well!

Let's get started.

Blockchain 101: Blockchain For Beginners

Blockchain technology defines the principle or the protocol that runs the operation on the Blockchain. Blockchain technology allows cryptographic currencies (digital digital currencies that are secured with cryptography) such as Bitcoin work in the same way as the internet allows email to be used.

Blockchains are immutable (unchangeable and therefore the transaction or data recorded cannot be modified) electronic ledger distributed (digital record of data or transactions stored across multiple locations on the internet) that has many uses in addition to cryptocurrencies.

Distributed and immutable are two of the most fundamental properties of blockchain. Being immutable for the ledger ensures that you can trust it to be reliable. Its distributed nature protects the blockchain from attack by the network.

Every transaction or record in the ledger is recorded in the form of a "block." For instance block records on the Bitcoin blockchain are comprised of an average of over 500 Bitcoin transactions.

The data contained in a block depends on and connected to information from a prior block, and over time creates an enchain of transactions. This is why the term blockchain comes up.

Types of Blockchains

There are four kinds of blockchains:

1. Public Blockchains

The public blockchains are free computer networks that are decentralized and accessible to all who wish to validate or request transactions (check for the accuracy). People (miners) who verify transactions are rewarded.

Public blockchains employ proof-ofwork or proof-of-stake consensus methods (discussed in a future post). Two examples of common public blockchains are the Bitcoin as well as the Ethereum (ETH) blockchains.

2. Private Blockchains

Private blockchains cannot be accessed by the public and are restricted in access. Users who wish to join need permission from the administrator of the system. The majority of them are controlled by a single entity, meaning they are centrally managed. For instance, Hyperledger is a private encrypted, authorized blockchain.

3. Hybrid Blockchains or Consortiums

Consortiums are a mix of blockchains that are private and public, and have features that are decentralized and centralized. For instance, Energy Web Foundation, Dragonchain and R3.

Note: There's not an absolute consensus as to the difference between these terms. There are some who distinguish between them, while others view them as identical.

4. Sidechains

Sidechains are kind of blockchain that is running in parallel to one of the chains. It permits users to transfer digital assets across two blockchains. It also improves scalability as well as efficiency. A good instance of an example of a Sidechain is Liquid Network.

History of Blockchain

Blockchain is more than just a database but a revolutionary technology stack that has digital trust that's revolutionizing how we transfer value and information via the internet, eliminating the gatekeepers from the transaction. For a more complete and thorough look, check out this article: A Brief Background of Blockchain Technology

Blockchain's history is older than you'd think We've condensed it by addressing four crucial questions:

Who Invented Blockchain?

The first blockchain-like protocol was suggested by the cryptographer David Chaum in 1982. In 1991, Stuart Haber and W. Scott Stornetta wrote about their research on Consortiums.

However, it wasn't Satoshi Nakamoto (presumed pseudonym used to describe an individual or group of individuals) who created and developed the first blockchain network following the introduction of the world's first cryptocurrency, Bitcoin.