What does it mean to know the blockchain in three minutes?
Blockchain is almost impossible to explain clearly in a few words to people who have heard of it for the first time. This article will give a brief introduction to everything newbies in the currency circle need to know about blockchain. It is recommended that interested friends can study in-depth by themselves (Google has many), or ask me in the message area!
What is blockchain
Blockchain is a mode/technology that encapsulates information and records it in series. I am used to understanding it as a special kind of cloud memory. One block records some information, and the next block records the next information. Over time, these blocks/information blocks are strung together like a chain.
special? Where is special
1. Decentralized storage
For example, in Google Cloud, after uploading user data, it will be stored in a single memory. In the cloud such as blockchain, when users transmit data, they will be stored in memories around the world at the same time. These storage spaces are called nodes.
2. No tampering / anti-hacking
Since information is stored in a decentralized manner, even if any (more than 50%) node is [hacked], the tampering of the information recorded by that node will not affect the ecology.
As mentioned earlier, people who perform [encapsulation] information sent by blockchain users (ex. transaction information) are called miners. Only the information that is encapsulated into the block by the miner and recorded on the chain in series can be regarded as the information that actually occurred. This is why blockchain transactions often need to wait a while to complete when [network congestion] (especially the transaction fee is relatively small) because each block has limited space, and if there is too much transaction information, some have to queue up.
The existence of cryptocurrency is the incentive given to miners by blockchain. After miners connect a block in series, the blockchain will generate some cryptocurrency as rewards for the miners. This process is like they [mining] the coins, so they are called [mining] and they are also called [miners].
Advantages/disadvantages of blockchain
A distributed and numerous blockchain for miners can achieve the safest and most transparent information storage. On this basis, people can do point-to-point direct transactions with unknown strangers without the guarantee of a third party (such as a bank), reducing the cost of trust, and making decentralized financial DeFi possible. Because the rules cannot be modified (or difficult to modify), cryptocurrencies such as Bitcoin and Ethereum are not afraid of excessive currency issuance leading to inflation.
On the other hand, the decentralized mechanism of the blockchain is usually less efficient than traditional centralized servers. And if there are not enough miners, it is also possible that someone interested may launch a malicious attack by controlling 51% of the node’s computing power and destroy the ecology.
Blockchains are divided into public chains and alliance chains. The players in the currency circle are exposed to the former. The most common applications of public chains are financial-related services, such as lending, insurance, asset chaining, and value transfer/storage. The consortium chain is more like a blockchain application used by companies to assist their own business, so the application is wider.