I'm not going to bore you with all the technicalities and code, just a good summary of the concept of blockchain technology.
Here's a sneak peek of what we'll cover in this thread:
• What is blockchain technology?
• Properties of a blockchain
• How does a blockchain work?
• Utilities of blockchain technology
• ...and many more!
So let's dive right in!!
💎What is a blockchain?
A blockchain can simply be defined as a digital ledger of transactions maintained by a peer to peer (P2P) network of computers in a way that makes it difficult to hack or alter.
Now let's relate the concept of a 'blockchain' to the real world.
In an office, some information can be written/recorded on a paper/document, and then saved/kept in a file. This file will then be kept in a file cabinet containing other files.
The information recorded = A transaction/information recorded on the blockchain
The file = A block
The file cabinet = The blockchain
This is just a simple analogy relating the concept of a blockchain to what we are familiar with.
The blockchain consists of a chain of blocks containing information connected together in such a way that these information are immutable.
💎 Properties of a blockchain
• Decentralization: Instead of being controlled by a single entity, blockchain operates on a P2P network, distributing control across many participants.
• Transparency: All blockchain transactions are public—open for everyone to see which can be viewed using blockchain explorers.
• Anonymity: Despite the fact that the blockchain is public, users can interact without revealing their true identities which increases privacy.
• Immutability: Once transactions/information is recorded on the blockchain, it cannot be erased, changed or altered.
• Time Stamped: All transactions carried out on a blockchain are time stamped which is essential for record/reference purposes.
• Time Efficiency: Most blockchains' transactions are very fast compared to our traditional financial systems.
• Borderless: Anyone anywhere across the world can use the blockchain irrespective of where they are located. As long as you have internet access, you are good to go.
• Security: The blocks on a blockchain are cryptographically linked with each other ensuring robust data protection.
💎How does a blockchain work?
When a user initiates a transaction, the transaction is verified by a network of computers to check the validity of the transaction. Once verified, this transaction is combined with other transactions to form a new data block for the blockchain.
This new block is then added to the existing blockchain, in a way that is permanent and unchangeable. Each block contains a unique code (called a hash) and the hash of the previous block in the chain, creating a chronological chain of blocks—hence the word-blockchain.
Once added to the chain, the transaction is complete and the update is visible across the network, ensuring transparency.
💎Utilities of blockchain technology
• Decentralized Finance: This is the most widely used utility of blockchain technology. Users can transact and use financial services on the blockchain in a decentralized manner, faster and cheaper.
• Smart Contracts: Blockchain technology enables the use of smart contacts that facilitate and enable automation of transactions without the need of a central party for execution.
• Voting Systems: Users can vote on the blockchain in a decentralized and transparent manner and results cannot be changed or altered.
• Tokenization of Assets: Assets can be tokenized on the blockchain enabling safe storage and transfer of ownership with transparency.
• Cross-Border Transactions: Users can easily perform cross-Border Transactions faster, cheaper and without any regulatory barriers.
• Gaming: Using NFTs and other in-game financial models built on blockchain tech, users can enjoy a new gaming model that also gives an opportunity to earn while playing.
• ...and many many more.
💎 Conclusion
Blockchain technology is reshaping our digital world with its vast array of applications, from DeFi to smart contracts, with transparency, security and efficiency across numerous industries.
Blockchain Technology is here to stay and you'll want to be a part of it!
Follow @Igeorge for more educational web3 guides and contents like this :)
