What is Blockchain? Blockchain’s application in life - Market247.io
The term "blockchain" has become commonly used in the field of technology. There is no denying that blockchain technology is developing very quickly and has more applications in life. However, the widespread adoption of this technology trend is still a big challenge. In this article, let's find out what is Blockchain technology, how it works and its applications to economics with Market247.io
What is Blockchain?
What is blockchain is the question of many people, especially in the context of technology becoming more and more popular today. Blockchain is a decentralized database that stores information in blocks and is linked together by encryption. These blocks expand over time and form a chain (Chain). Each block is closely linked to the previous block, which contains information about the block creation time, timecode and transaction data.
In other words, to answer the question what is Blockchain, this is an electronic ledger distributed on many computers, where all transaction information is stored. The decentralized distribution on many computers makes it extremely difficult to attack blocks in the Blockchain. This ensures that the information stored in the Blockchain cannot be altered in any way.
Features of Blockchain technology
To get a better understanding of what is Blockchain clearly, we will learn the properties of Blockchain technology.
- Decentralization: Blockchain platform operates independently according to the available algorithms of computers, not controlled by any individual or organization.
- Dispersion: As mentioned above, blocks of data are the same but are distributed across many computers in different places. Therefore, if a place is lost or damaged, the data is still kept intact on the Blockchain.
- Confidentiality: Only the holder of the Private Key has access to the data inside the Blockchain
- Immutability: Once the data has been entered into the blocks of the Blockchain, it cannot be changed or modified by anyone, thanks to the consensus algorithm and the hash code.
- Transparency: Transactions on the Blockchain platform are stored and everyone can check the information of these transactions. Based on that, users can check and retrieve transaction history. In addition, the owner can decentralize so that others have partial access on the Blockchain.
- Smart Contract Integration: Based on the terms specified in the smart contract, the rules will be enforced when the conditions are accepted, no one can stop and cancel.
How does Blockchain work?
How does blockchain work to ensure the transparency of stored information? We will find out what is Blockchain working mechanism?
When any transaction takes place, it is recorded as a “Block” of data. The information is stored in blocks like who, what, when, where, how much or even the status - the temperature of a food shipment, for example.
Each block is linked to the previous block and then these blocks link together to form a chain. The blocks confirm the exact time and sequence of transactions, and the blocks are securely linked together to prevent any information in the block from being changed or a block being inserted between two existing blocks.
Transactions are blocked together in an irreversible chain: An additional chain that enhances verification of the previous block. This makes the forgery of the Blockchain obvious, giving Blockchain its power of immutability. It is this that eliminates the possibility of tampering by any negative effects, thereby building a ledger where transactions are stored that users can trust completely.
What is Blockchain Algorithm?
To better understand what Blockchain technology is, we will learn about what is Blockchain algorithm.
What is Blockchain Algorithm?
To understand What is Blockchain technology clearly, let’s find out about What is Blockchain Algorithm
Blockchain consensus algorithm is the consent of the majority of nodes in the network to confirm that the information in the blocks is correct and allows to record the transaction information into the blocks in the Blockchain network.
If there is any change in the information in the blocks, this data is compared with the data in the other blocks. If there is a difference then it will not allow new data to be stored into the Blockchain. That is how Blockchain works to resist changes in stored data.
Blockchain algorithms are commonly used today
Proof of Work (PoW)
Proof of Work is a proof of work algorithm. In this consensus mechanism, miners will use the power of computers to find answers to problems. After solving, they will gain the right to confirm the transaction and create a new block in the Blockchain. This mechanism is attached to the famous cryptocurrency Bitcoin (BTC).
Proof of Stake (PoS)
Proof of Stake is a proof of stake algorithm. This mechanism differs from PoW in that there are no miners, instead participants validating transactions will have to stake a certain amount of coins to win the right to validate transactions and create blocks. This gives PoS a huge advantage and saves energy and protects the environment.
Some projects use this mechanism such as Ethereum, Cosmos, Celo, etc.
Delegated Proof of Stake (DPoS)
DPoS is a proof-of-stake algorithm. Users instead of staking to have the right to validate transactions, token holders will vote for a select group to perform the role of validating transactions.
DPoS helps to improve honesty and fairness by implementing frequent voting operations and continuously shuffling the system. This helps ensure that those selected are honest and accountable.
Proof of Authority (PoA)
Proof of Authority is a consensus algorithm based on reputation. Block validators will not be based on the number of coins they own, but on their own reputation.
Proof of Weight (PoWeight)
Proof of Weight is a consensus algorithm based on the Algorand consensus algorithm. The way it works is similar to PoS, also based on the number of coins that users hold, equivalent to the probability of holding the right to create the next Blockchain. Besides, PoWeight applies a few other values.
Proof of History (PoH)
Proof of History is a consensus algorithm that verifies the order and timing of transactions in the network. This mechanism is built to solve the problem of timing in a decentralized network.
Proof of Reputation (PoR)
Proof of Reputation is a consensus algorithm that relies on the reputation of the participating parties to keep the network secure. Participating in Blockchain validation is to ensure enough credibility, so that if they intentionally fraudulently attack the system, their reputation will be affected.
Versions of Blockchain technology
After answering the question: What is Blockchain technology, let’s discover 4 version of Blockchain.
Since its launch, Blockchain has gone through 4 stages of development.
Blockchain Technology 1.0 - Currency
Blockchain technology 1.0 is the first version to be released. Cryptocurrency is considered the first application of Blockchain technology, with the birth and rapid development of the Bitcoin cryptocurrency. Thanks to the application of a decentralized distributed ledger, transactions on the Blockchain are processed quickly, efficiently and transparently. So far, a lot of cryptocurrencies have been born, the crypto market has grown more than ever, showing a strong explosion of currencies based on Blockchain applications.
Blockchain 2.0 Technology - Smart Contract
This is the next version of Blockchain technology. With smart contracts, transactions on the Blockchain platform will be drastically reduced in terms of transaction costs, anti-fraud, and increased transparency compared to before. With the application of smart contracts, traditional contracts are gradually replaced, complex agreements are guaranteed to be executed efficiently.
Blockchain technology 3.0 - Decentralized application
Decentralized Application - DApp is the 3rd version of Blockchain technology. These are independently deployed software, not on any single server. Instead, they are stored distributed on decentralized repositories. Most DApps are digital applications that run on a peer-to-peer blockchain network of computers.
Blockchain technology 4.0 - Practical application
Blockchain 4.0 technology is the latest version today. This is the most complete version, inheriting the advantages of previous versions, with the goal of applying in business activities. This is considered a long-term vision, but there are still many challenges to be recognized by the world and widely applied.
What is Blockchain’s application in life?
Although facing many difficulties in the process of widespread application in many economic fields, we cannot deny the great benefits that Blockchain brings. Currently, Blockchain will be applied in many fields such as:
- Applications in production: Blockchain replaces traditional devices to effectively grant management rights such as tracking the product creation process, managing product information, transaction information .... Blockchain will significantly increase the efficiency of the supply chain management process.
- Financial and banking services: The application of Blockchain in the financial and banking sector will help solve the dilemma that has existed so far. It is a matter of information security as well as checking the transparency of intermediaries.
- Healthcare: The application of Blockchain in the Healthcare sector will make it possible for authorized parties to access the same exact and authenticated information within seconds.
- E-commerce: One of the biggest problems of the e-commerce sector is the security and management of the supply chain, the process of transporting goods to consumers. The integration of smart contracts will help facilitate the signing of related parties easily, saving costs by eliminating intermediaries when linking with multinational enterprises.
- Agricultural field: The traceability of goods, ensuring the origin of products is always a matter of concern to consumers. With a distributed ledger system, stored information is always tracked by anyone and cannot be changed, thereby ensuring clarity and transparency.
Above is the complete overview of Blockchain technology. This is a technology trend that promises to explode in the near future. Market247.io believes that through this article, you have better understand what is Blockchain Technology, the applications of Blockchain in life. If you have any questions, don't forget to send us a message for a quick response.
FAQs - What is Blockchain?
What are the 4 different types of Blockchain technology?
- Public Blockchain.
- Private Blockchain.
- Mixed blockchain.
- Blockchain alliance.
What is Blockchain’s Example?
An example of a major Blockchain platform is Ethereum. With the Ethereum platform, users can also create programmable tokens and smart contracts built directly on top of the Ethereum blockchain infrastructure.
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