All you need to know about Blockchain.
I like Cathie Wood's description of everything new related to the Web: "More unfinished business of the Internet."
Because it just got more interesting...and decentralized.
It's revolutionary, redefining transport, communication, and information transparency as we know it.
And because it's birthed Web3 and cryptocurrencies, I'm also following this field.
I'm talking about Blockchain.
What is Blockchain?
Blockchain is a decentralized public ledger that stores, records, and shares digital transactions across a computer network.
How Blockchain works
Think of it as "a chain of blocks."
Each block is a computer on the network, and each computer has a unique ID called a hash.
Jargon: Computer = Block = Node. Same thing.
Each computer has two hashes: Its own and that of the previous computer.
Each participant on the network has a copy of the entire blockchain and its transactions, hence the transparency.
Blockchain transactions are secure, so you can't tamper with them.
Blockchain is decentralized - it's free from a central authority.
If something happens to one block, the whole chain and the hashes of each block are altered.
Blockchain's most popular use is transactions.
Blockchain Features
Transparency: Everyone can see blockchain transactions.
Immutability: No one can edit a transaction once it's on the blockchain.
Security: Just like crypto, blockchain uses advanced cryptographic techniques to secure data.
Decentralization: Blockchain is decentralized, so there's no central authority to govern it.
Consensus Mechanisms: This is how nodes "agree" on a transaction in a blockchain. Bitcoin uses Proof of Work (PoW), while Ethereum uses Proof of Stake (PoS).
How to create a Blockchain
Choose the right tech stack: Using programming languages and environments such as Python, JavaScript, and Go.
Design the Data Structure: You choose how to compose each block, its hash numbers, and the information that will traverse the blockchain.
Choose a consensus mechanism: For now, either Proof of Work or Proof of Stake.
Connect each block.
Test and debug.
Deploy.
Blockchain Use Cases
Cryptocurrencies: Read about cryptos here.
Smart Contracts: These are self-executing contracts that trigger an action once a specific condition is met.
Think of a Smart Contract as a vending machine.
When you insert some quarters into the machine and select a snack, the machine automatically operates once you've chosen a snack (e.g., Mint Chocolate for $2.25) and will dispense it to you.
Similarly, a smart contract has several predefined codes that will trigger once a specific condition is fulfilled, e.g., paying 3 ETH for an NFT.
NFTs: NFTs are digital assets minted and distributed on the blockchain. Watch this cool NFT video.
dApps: Decentralized apps built and run on a blockchain.
Supply Chain Management: Blockchain can track the movement of goods along the supply chain.
Voting Systems: You can vote on the blockchain because your votes are publicly visible and hard to tamper with. This will likely reduce election malpractices worldwide.
Healthcare: Health professionals can secure patient data on the blockchain and trace drug distribution from suppliers to pharmacies and to the final patient.
Pros and Cons
Pros
Increased trust and transparency because all nodes share the same ledger and approve its transactions.
Enhanced security from the cryptographic techniques used to craft blockchain.
Reduced costs by eliminating the transactional middleman.
Improved tracing of goods along the supply chain.
Cons
Accessibility: At its basic form, blockchain requires internet access, limiting places that have none.
Scalability: It's hard to scale blockchain because the existing ones (Bitcoin and Ethereum) are slow, have high costs, and can't transact huge volumes at a go (versus Visa.)
Regulation: Bitcoin is unregulated, and unregulation breeds illegalities. Governing the blockchain might be the only cure here.
Energy Consumption: Ethereum's Proof of Work consensus, for example, consumes enormous amounts of energy enough to raise environmental concerns.
Conclusion
Blockchain is a big, transformative, and legendary technology that's just warming up.
It can revolutionize industries worldwide and empower us to rethink new transportation applications.
I think blockchain is one to watch out for in the future; like all pieces of tech, it's evolving.
But one thing is for sure: As it stands, the future is decentralized.
Until then,
.
.
.
~T.K.K
References
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