Wondering what blockchain is about? Blockchain store data in blocks that are then chained or linked together. The Blockchain is a distributed database or a distributed peer 2 peer ledger that the network must confirm and encrypt.
Blockchain is not Bitcoin. The Bitcoin protocol is built on a blockchain. What you need to understand here is that Bitcoin merely uses blockchain as a means to record a ledger of payments transparently. Still, blockchain can be used to record any number of data points immutably.
What is Blockchain
Blockchain can seem complicated, and some applications of it are, but its core concept is really quite simple. A blockchain is a type of database. To better understand blockchain, you first need to understand what a database actually is.
A database is simply a record or collection of information stored on a computer system. A database is usually organised or formatted to make searching or filtering easier. A database can store a lot of information and can be accessed and manipulated quickly and easily by many users at once.
While a database may be accessible to many people, it is usually managed and owned by a business. The business and often an individual has complete control over how it works and the data within it. This is centralized.
So how does a blockchain differ from a database?
All blockchains are databases, but not all databases are blockchains.
The main difference is the structure. A blockchain collects or groups bits of data and organises them into blocks. In Crypto, a block is a file that records a number of the most recent cryptocurrency transactions.
These blocks are chained onto the previously filled block, forming a chain of data known as the “blockchain.” All new information that follows that freshly added block is compiled into a newly formed block which is then added to the chain once complete. When completed, each block is timestamped. It is then set in stone and becomes an irreversible data timeline when implemented in a decentralized nature.
Example of Blockchain Data
Let’s Talk about Decentralized.
The example above is a screenshot of a full node that I run on my computer. I will use this as an example. This blockchain is called DeFiChain. It is a decentralized blockchain dedicated to fast, intelligent and transparent financial services, accessible by everyone.
Decentralized blockchains are immutable, which means that the data entered is irreversible. For Crypto, this means that transactions are permanently recorded and viewable to anyone.
Anyone can view all the latest blocks, transactions and view the whole history of the blockchain here ===>>View DeFiChain Blockchain.
So what makes it Decentralized?
To be clear, not all blockchains are decentralized. Private, centralized blockchains, where the computers that make up their network are owned and operated by a single entity, exist.
A decentralized network runs on many computers (nodes) worldwide and is not operated by a company or a single identity. No one person has control, but rather everyone on the network has equal control. Each node on the blockchain network has a full record of the data stored since its beginning.
If one node is corrupted, the network has thousands of other nodes that can reference the data to correct itself. No one can manipulate, falsify or change the records on the blockchain in a decentralized system. It is an exact and transparent order of events.
The only way a system can be changed is if the majority of the decentralized network’s computing power agrees on said changes. You need at least a 51% vote or control of the network to make this happen. This ensures that whatever changes do occur are in the best interests of the majority.
Different Types of Blockchain
So now you know what the blockchain is about, you realise there is more than one, right? Remember, a blockchain is just a database. Just like anyone can create a database, anyone can start a blockchain network.
The Bitcoin blockchain would be the best-known one. On the 3rd of January 2009, the bitcoin network came into existence with Satoshi Nakamoto mining the genesis block of bitcoin (block number 0), which had a reward of 50 bitcoins.
Ethereum is another major network. It was launched in July 2015. Ethereum is a little different from the Blockchain that Bitcoin runs on.
Read what Investopedia says about Ethereum below.
“Ethereum enables the deployment of smart contracts and decentralized applications (dapps) to be built and run without any downtime, fraud, control or interference from a third party. Ethereum comes complete with its own programming language which runs on a blockchain, enabling developers to build and run distributed applications.”
Both blockchains but can have different uses. All sorts of different applications have been realised using smart contracts. The Ethereum network has pros and cons, but the concepts have opened all sorts of possibilities in the DeFi space. It’s not just about crypto anymore either; blockchain technology can be used in all sorts of business applications.
I personally run the DeFiChain on my computer. I run a full node and provide liquidity to the DEX (decentralized exchange). I get an outstanding return; it is called Liquidity Mining. I get around a 100% APY. To find out more about how this is possible, read my post ===> What is Liquidity Mining.
Forget Bitcoin – Blockchain is the Future.
Up until recently, Cryptocurrency was the only real use for blockchain. It is possible blockchain technology will ultimately be seen as the most important innovation to come out of cryptocurrency.
Blockchain applications are being discovered every day. Over the next few years, we will see blockchain adopted by a lot of big business. It can be used for things like voting, and blockchain would ensure it could NOT be corrupted. Medical records could be stored on the blockchain. It can be used for tracking, agreements, and secure payment.
Healthcare, Media, Real Estate, Supply Chain Management and Energy, Taxes, Voting, Identity Management, Record Management, Peer 2 Peer Transactions are just a few things that could benefit from using blockchain. Blockchain will become mainstream as more and more businesses adopt the technology and realise its potential.
DeFi & Blockchain
DeFi is a hot topic in the crypto world at the moment. With the use of blockchain technology, the whole financial industry can be decentralized. The DeFiChain that I use is a relatively new project making BIG waves in the DeFi space. They have anchored their blockchain to Bitcoin. This has given them a big advantage over other networks. Also, being dedicated to financial services only is a big plus.
With DeFi, you will be able to do everything you can now financially but without using a bank. You will be able to borrow & lend, buy stocks, exchange tokens, do real estate transaction and all sorts of other things. The beauty of DeFi is you will be able to do all of this on your terms, and the transactions will be peer 2 peer.
My Final Thoughts on Blockchain.
Whether you like it or not, blockchain technology will play a big part in future business. It doesn’t matter if you understand it or not; you will use it in the future. I personally am excited by all the possibilities that this will bring, especially in the crypto space. Because of blockchain, I can now put my crypto to work for me and generate a passive income without trading.
Although I have only just touched on Blockchain and the possibilities it can bring, the next time someone asked you, What is Blockchain About? Hopefully, you can tell them a little bit about it. If you would like to know more and find out how you can make a passive income from blockchain technology, check out my other post ===> CAKE DeFi – Product Overview
I love crypto and love the opportunities blockchain is bringing to the crypto space. It has enabled me to create – Wealth with Crypto.
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! DISCLAIMER: I am not a financial advisor. This is not financial advice. The content and material I provide on 2dsirecrypto.com is my opinion only and general in nature. Always do your own research before investing any money. You should always understand the risks involved in trading and investing and seek advice from licensed professionals before undertaking any investments of your own.