The blockchain and Cryptocurrency Explains Simply - The Comprehensive Minds

The blockchain and Cryptocurrency Explains Simply

The blockchain and Cryptocurrency Explains Simply


The blockchain and Cryptocurrency




What is the blockchain and how does it work?

There is a lot of talk about blockchain technology today. We are in a historic moment where this innovation attracts a lot of attention, but too often we are caught in a still fairly general mix of cryptocurrencies, bitcoin, blockchain platforms, smart contracts, and so on.


This guide was born with the intention of keeping order. What is this technology for? The blockchain (literally "chain of blocks") takes advantage of the properties of a computer network of nodes and enables a registry of data and information (e.g. transactions) to be uniquely and securely managed and updated in an open, shared, and distributed manner without the need a central control and verification body.


Blockchain applications that are expected to be relevant in many sectors are often characterized by the need for disintermediation and decentralization. This innovation may make it possible to dispense with banks, notaries, financial institutions, etc.


Blockchain technologies are included in the broader family of distributed ledger technologies, i.e.  Systems that are based on a distributed ledger and can be read and modified by multiple nodes on a network. In order to validate the changes to be made to the registry, the nodes must reach a consensus in the absence of a central point. The way in which consensus is reached and the structure of the register are some of the features that characterize the various distributed ledger technologies.



Would you like to learn how to use blockchain tools?

The blockchain is, therefore, a subfamily of technologies, or, as is often stated, a series of technologies where the ledger is structured as a chain of blocks of transactions, and the consensus is distributed across all nodes of the network. All nodes can participate in the transaction validation process in order to be included in the ledger.


Starting with the definition of blockchain, we can begin to examine the most interesting aspects of this technology. The blockchain digital revolution that emerged from the world of bitcoin and cryptocurrency is actually just beginning. The applications are diverse, the potential is enormous, still largely to be researched and not just in the financial sector. The task of this guide is to explain the blockchain in a simple way, focusing on the business opportunities and the benefits to be taken. All with the help of the Blockchain & Distributed Ledger Observatory, which has always set itself the goal of producing knowledge and bringing order and clarity to these questions. In this guide we will examine into:


The history of the blockchain and bitcoin

The properties of the blockchain

The galaxies of the blockchain: the internet of value

- From bitcoin to new platforms

The areas of application of the blockchain

- The blockchain in the finance and insurance sector

- The blockchain in the field of advertising

Bitcoin and its brothers: cryptocurrencies

From cryptocurrencies to stable coins

Token and ICO (Initial Coin Offering)

Smart contracts in the blockchain area


The history of the blockchain: from Bitcoin to the "crypto winter"

The relationship between blockchain and bitcoin is as close as it is critical. Bitcoin was released in 2009 and was the first cryptocurrency to use a new type of distributed ledger known as a blockchain. One of the innovations introduced by Bitcoins is the fact that every transaction was legitimized by a decentralized network and not by the central authorities. Though short, the history of this cryptocurrency has shaped and stimulated the development of blockchain technologies between experimentation, perplexity, and unprecedented media hype. What about the future? Everything still to be written.

Learn more about the history of Bitcoin and Blockchain and how to earn from them>>




The characteristics of blockchain technologies

As we'll see later in this guide, there are many platforms that could help make the Internet of Value possible: from Bitcoin to Ethereum, from Iota to Nano, from Zcash to Monero. There are over 1,000 platforms today, with more popping up every day. Each is characterized by different configurations, but it is possible to identify 7 common features of blockchain technology. The first obviously relates to digitizing and converting data to a digital format. Here are the other six:


DECENTRALIZATION

Information is recorded by distributing it across multiple nodes to ensure IT security and system stability.



TRACEABILITY OF TRANSFERS

Every element in the register is traceable in all its parts and can be traced back to the exact origin.


DISINTERMEDIATION

The platforms allow you to manage transactions without intermediaries, i.e. Without trustworthy central entities.


TRANSPARENCY AND VERIFICABILITY

The content of the register is transparent and visible to all and easily accessible and verifiable.


IMMUTABILITY OF THE REGISTER

Once written to the registry, the data cannot be changed without the consent of the network


PROGRAMMABILITY OF TRANSFERS

Ability to program certain actions that are carried out when certain conditions occur


The blockchain galaxies: the universe of the Internet of Values

Blockchain technology is part of a complex and constantly evolving universe that can be defined as the "Internet of Value", literally the "Internet of Value", or rather as systems that allow value to be exchanged on the Internet with the same simplicity that with today's information.


The Internet of Value is defined as a digital network of nodes that transmit value through a system of algorithms and cryptographic rules that make it possible to reach consensus on the changes that need to be made to a distributed ledger, even without trust keeps track of unique digital asset transfers. Within this universe, there are therefore different galaxies or rather different platforms that enable the development of blockchain solutions. These platforms can be divided into two broad groups: without permission and with permission.


Unauthorized blockchains are those in which anyone can participate in the transaction validation process and anyone can become a node in the network. Among the permissionless, the most famous is Bitcoin and Ethereum, however, there are many others that have generated their own cryptographic currency (over 900).

On the contrary, approved blockchains are characterized by limited access to the network for a few authorized participants and by a validation process that is entrusted to a limited group of actors. These include Corda and Hyperledger.

This classification includes some "hybrid" solutions like Ripple, with which anyone can participate in the network, but only a few that deal with the validation of transactions.


In the beginning, it was Bitcoin

The blockchain is, therefore, a very complex system around which numerous galaxies revolve. First of all, there is a bitcoin. The platform from which the first cryptocurrency emerged in 2009 was born in 2008 on the initiative of Satoshi Nakamoto. Bitcoin enables a protocol that uses cryptographic technologies, computer networks, and mechanism design to implement a decentralized, non-licensable, secure, and programmable recording and exchange system. There are several fundamental and innovative features of this protocol that have marked the furrow for the development of the blockchain and new platforms over the years.

Learn more about how to earn money from Bitcoin  >>


The blockchain beyond the limits of Bitcoin

Despite its numerous advantages, Bitcoin is characterized by several critical problems. One of the most obvious is the limited range of expression, which in turn diminishes the possibilities for automation. This is why Ethereum was born, an open-source platform based on blockchain technology that solves this problem thanks to a special scripting language. Ethereum has almost all the characteristics of Bitcoin, but also many limitations: high energy consumption, poor privacy protection, and low frequency of transactions. To overcome all of these limits, new platforms were born. From Primecoin to Ripple, from Iota to Zcash, which of them will prevail in the long term?


The areas of application of the blockchain

The great attention paid to the blockchain also brings a lot of confusion. Despite the media hype in recent years and the interesting functions described above, one wonders in which application areas this technology can actually be used and which industries can best use the advantages and revolutionary properties of the blockchain.




Today, several companies around the world have started experimenting with blockchain and distributed ledger solutions. And the areas of application, as well as the solutions and development platforms, have become clearer. The most advanced sector is certainly Finance and Insurance, which was first activated to respond to the Bitcoin threat and which is already in the application development phase of the projects. There is no shortage of projects and applications in the areas of agri-food, advertising, logistics, and even public administration. 


FINANCE & INSURANCE

Blockchain is one of the most talked-about technologies in the financial world. Banks and industry players have recognized the importance of this innovation, and there are more and more services based on blockchain and distributed ledger promoted by financial and insurance institutions around the world. 


DIGITAL ADVERTISING & NEW MEDIA

Blockchain technology can also affect the world of digital advertising and the media in general. So far, three areas of application have been identified for this sector: advertising (and in particular user engagement and media transparency), content (copy direction management and identification of fake news), and social media (from identity to advertising). 


Bitcoin and its brothers: cryptocurrencies

Not just bitcoin. In the past few years, the world of cryptocurrencies has literally exploded, so there are at least a thousand of them today. But what exactly are these cryptocurrencies? Alternative financial instruments? Real currencies? In the present definition, they are decentralized digital coins that use cryptographic techniques to ensure the security of exchanges between users. There are many differences from traditional currencies, as well as from the new platforms that are in the spotlight. Let's talk about Ethereum, Ripple, Corda, Hyperledger, names now well-known and not just with insiders. There are many strengths, but also different weaknesses. One thing is certain: the digital revolution in cryptocurrencies continues!

Learn how to get huge profit from cryptocurrencies and blockchain >>




From cryptocurrencies to stable coins

Stablecoin and blockchain

The same "revolutionary" properties of cryptocurrencies combined with the stability of legal tender currencies such as euros and dollars. In a word: stablecoin. The stable coins represent the meeting of two worlds and could offer the advantages of two currency systems: the versatility and programmability of Bitcoin and children on the one hand and the guarantees of coins through traditional mechanisms on the other. Not surprisingly, the main criticality of cryptocurrencies is volatility. Indeed, the schizophrenic trend of this market in recent years has been the biggest frontier for its introduction. You can overcome this limit by operating stable coins. 


The world of ICOs (Initial Coin Offering) and blockchain tokens

ICO and token are two terms that have now entered the common language of many protagonists in the blockchain world. However, they are widely used without fully understanding the features and problems that characterize them. Overall, these are tools that, at least potentially, enable very innovative business models. However, further regulatory developments are required to take full advantage of the benefits. To date, there have been significant restrictions and recent investor fraud confirms this.


Smart Contracts in the Blockchain Area

The guide dedicated to the blockchain cannot be closed without first mentioning smart contracts. Although the concept of smart contracts at the IT level existed before the advent of this technology, it was precisely the blockchain that "enhanced" the properties and potential of these so-called "smart contracts". Therefore, in order to understand what smart contracts are and what innovations they bring compared to traditional contracts, it is important to delve into them within the broader scenario of blockchain technology. A still uncertain scenario in which opportunities and ambiguities overlap ...

Learn more about investing in  smart contracts >>

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