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Do you really know what is blockchain? Take you step by step to understand the blockchain!

first lesson

By RoyalPublished 6 months ago 7 min read

1. The origin of blockchain

The blockchain was originally invented in 2008 by one or a group of people named "Satoshi Nakamoto". The earliest application of block chain technology.

Satoshi Nakamoto's paper proposed a decentralized database system that can realize decentralized digital currency transactions and ensure the security and reliability of transactions. This system is called a "blockchain" because it packages all transaction records into blocks, which are then linked together in chronological order to form a chain structure.

The success of Bitcoin has led to the attention of blockchain technology, and people have begun to explore the application of blockchain technology in other fields, such as supply chain management, financial services, smart contracts, etc. At present, blockchain technology has become a hot field, and many companies and organizations are investing a lot of resources in research and application.

funny little story

The Blockchain Pizza Festival is an interesting story that stems from a tradition in the Bitcoin community. On May 22, 2010, Bitcoin community member Laszlo Hanyecz posted a post offering to exchange 10,000 Bitcoins for two pizzas. Bitcoin had no value at the time, but Laszlo Hanyecz believed that this digital currency would have value in the future, so he was willing to exchange it for real-life items.

A member of the bitcoin community accepted the deal, ordered two pizzas for Laszlo Hanyecz, and paid for it with 10,000 bitcoins. This event has become a tradition in the Bitcoin community. Every year on May 22, it is called the "Blockchain Pizza Festival." Members of the Bitcoin community will use Bitcoin or other cryptocurrencies to buy pizza to commemorate this event.

This story reflects that the value and application of Bitcoin and blockchain technology did not have clear boundaries at the beginning, but as time went by, people gradually realized the potential and value of blockchain technology. Now, blockchain has become an important technical field, applied in finance, supply chain management, smart contracts, etc., and has produced huge impact and value. The Blockchain Pizza Festival has become a historical witness, showing the cohesion and belief of the blockchain community, and also reflecting the history and value of technological development.

2. Introduction to Blockchain

Blockchain technology is a decentralized database technology that uses cryptography in digital records to ensure the security and reliability of transactions. Its main features are decentralization, immutability and traceability.

The core of blockchain technology is a decentralized database, which packages transactions into blocks, and each block has a unique digital fingerprint, called "hash value". These blocks are linked together in chronological order to form an ever-expanding chain called a "blockchain". Each block contains the hash value of the previous block, so no one can modify the data in the block, otherwise the connectivity of the entire blockchain will be broken.

Blockchain technology has many applications, most notably in cryptocurrencies such as Bitcoin. In addition, blockchain technology can also be applied to supply chain management, smart contracts, voting, identity verification and other fields.

3. Differentiation of blockchain

In the field of blockchain, it can be distinguished according to different characteristics, mainly as follows:

(1) Public Blockchain: Anyone can participate and view and verify data. Bitcoin and Ethereum are public chains. (such as Bitcoin (Bitcoin), Ethereum (Ethereum), etc.)

(2) Consortium Blockchain: Participation is limited to members of specific organizations or institutions, authorization is required to join, and participants can jointly manage and verify data. (e.g. R3 Corda, Enterprise Ethereum Alliance, etc.)

(3) Private Blockchain: It is limited to the internal use of a single organization or institution. Participants need to be authorized to join, and can fully control and manage data. (such as bank internal settlement system, government agency or enterprise internal management system, etc.)

(4) Hybrid Blockchain: Combining the characteristics of public chain and consortium chain or private chain, it can be open to anyone to participate, or restrict participants, with flexibility and diversity. (e.g. IBM Fabric, EOS, etc.)

These different blockchain types have differences in application scenarios and security, so they need to be selected according to specific needs and situations.

In addition, the blockchain paradigm is applied in different fields, such as finance, supply chain management, government management, etc., and has produced huge influence and value in the corresponding fields.

4. Current practical application of blockchain

Blockchain has been used practically in many fields, here are some examples:

(1) Cryptocurrency: Cryptocurrency such as Bitcoin and Ethereum is one of the most well-known applications of blockchain technology.

(2) Asset management: Blockchain can be used to manage assets, such as real estate, artwork, etc., which can achieve more transparent transactions and ownership records.

(3) Supply chain management: Blockchain can be used to monitor the supply chain of products, such as food safety, drug traceability, etc., which can achieve more efficient supervision and tracking.

(4) Identity verification: Blockchain can be used for identity verification, such as confirming the identity of voters in elections, or confirming the identity of network users.

Internet of Things: Blockchain can be used for interaction and verification between IoT devices, such as energy management and waste disposal in smart cities.

These practical examples show that blockchain technology has the potential to change the way many industries operate and bring more value to businesses and consumers.

5. Disadvantages of blockchain

While blockchain technology has many advantages, it also has some disadvantages, the following are some common examples:

(1) Energy consumption: Blockchains consume a lot of energy, especially cryptocurrencies like Bitcoin, because of the complex calculations required for transaction verification and block generation.

(2) Scalability: The existing blockchain technology may become unstable when processing a large number of transactions, because the blockchain needs to broadcast each transaction to nodes on the network for verification and processing.

(3) Transmission speed and cost: Blockchain needs time and cost to broadcast transactions and generate blocks, so it may not be as good as traditional centralized systems in terms of speed and cost.

(4) Risk management: Since blockchain is a decentralized technology, better risk management measures are needed to ensure security and stability, such as preventing 51% attacks, etc.

These disadvantages make blockchain technology less applicable in some situations, so when considering the use of blockchain technology, you need to carefully weigh its advantages and disadvantages and make the best decision based on the actual situation.

Supplementary Note

#51% attack refers to a way of attacking the blockchain network. By mastering more than 51% of the computing power (or holding more than 51% of the cryptocurrency) on the blockchain network, the attacker can carry out Some improper operations, such as double spending, preventing other nodes from conducting transactions, etc.

When attackers have more than 51% of the computing power, they can control the entire blockchain network because they can easily generate and verify transactions, and can prevent other nodes from verifying transactions, thereby controlling the transaction records of the entire blockchain.

To prevent 51% attacks, some blockchain technologies use different consensus mechanisms, such as Proof of Stake (PoS), Delegated Proof of Stake (DPoS), etc. Security of the blockchain network.

6. Development stage of blockchain

The development of blockchain technology can be roughly divided into the following stages:

Prototype stage (around 2009-2014): At this stage, Bitcoin is a representative of blockchain technology, which is mainly used in cryptocurrency transactions.

(1) Expansion stage (around 2014-2018): At this stage, people began to realize the value and potential of blockchain technology, and began to explore more application scenarios, such as smart contracts, supply chain management, identity authentication, etc. .

(2) Mature stage (2018-2022): At this stage, the application of blockchain technology has entered the stage of commercialization and practicality, and more and more enterprises and institutions have begun to use blockchain technology to improve their business processes and improve efficiency.

(3) Innovation stage (2022-?): At this stage, innovative applications of blockchain technology will continue to emerge, and will be combined with other emerging technologies, such as artificial intelligence, Internet of Things, 5G, etc., to jointly promote industry and Social development.

The above leads the readers to slowly explore the mysterious world full of unknowns and vastness!

Like to track, leave a comment, subscribe, and take you to further understand blockchain and technology applications! Thanks for the support!

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