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What is blockchain? What are the applications for 2021? Just give an example to understand!

If you are contacting the blockchain for the first time, you may find it very complicated and difficult to understand, but the core concept of the blockchain is actually very simple. It is a system responsible for recording, and the blockchain technology adds some methods to make the records correct. It is correct and cannot be tampered with so that both old and new users can see complete information from beginning to end no matter what point of time they enter. The most famous application of blockchain is Bitcoin. The inventor of Bitcoin will Blockchain technology is used as a ledger to record all bitcoin transaction data. This article will also introduce in detail what is a blockchain, its characteristics, and what applications are there. Welcome to reference.

Key lazy bag

  • Blockchain is a system for recording data
  • Blockchain uses blocks to record data and chain together to ensure that it cannot be tampered with
  • Blockchain technology can be applied in many places, but the most well-known application is Bitcoin
  • At present, the application of blockchain technology in the financial field is the most vigorous development

1. What is a blockchain?

First, we disassemble the blockchain into “blocks” and “chains” to explain how the blockchain technology records data and ensures that the data cannot be tampered with. As shown in the figure above, data will be recorded in blocks in chronological order. In addition to recording data, each block also contains the current block hash value (Hash) and the previous block hash value. The hash value can be guaranteed Each block is chained together according to the correct new and old order, and the old record block and the block can no longer produce a block interspersed in the middle to maintain the correctness of the data recorded in the blockchain. Take Bitcoin as an example. In the above figure, block 1 assumes that A is transferred to B 1 Bitcoin, block 2 is B transferred to C 2 Bitcoins, and block 3 is C transferred to A and B each 1 Bitcoin By analogy, the transfer data on the entire blockchain is transparent, and we will know how all the transaction records and how much money each person’s account should have from the beginning to the present. The people who are responsible for keeping accounts and producing new blocks on Bitcoin are called miners/nodes. Every miner has the same ledger to ensure that everyone’s data is consistent and correct. The miners who generate new blocks receive Bitcoin rewards. It is called mining.

As shown in the figure above, some people have visualized the status of Bitcoin and Ethereum blockchains. On the right, Bitcoin #668587 and #668588 are the block numbers. The small person in the orange box represents each new transaction. The current Bitcoin On average, the coin can process 4.08 transactions per second. Each transaction fee is $6.89. A new block will be generated in about 15 minutes. The transaction volume per second and the time for generating a new block are not fixed and will follow the block. The degree of congestion of transactions on the chain has changed.

2. What are the characteristics of blockchain?

Broadly speaking, the blockchain can be regarded as a record system managed by decentralized nodes. All nodes hold the same record from beginning to end to ensure that the data is correct. It also allows the blockchain to have the following characteristics:

You can easily trace all data from the creation of the block to the present on the blockchain

Decentralization of
all nodes ensure that the blockchain runs 24 hours a day and the nodes automatically execute transactions. Unless all nodes are shut down, no one can prevent transaction execution.

Use Bitcoin to receive and pay only a Bitcoin wallet to start, Bitcoin wallet can be obtained without any fees, transfer on the Bitcoin system unless your IP is tracked, no one will know who you are, and help You may not know the node where you execute the transaction at all and will automatically execute the transaction no matter who you are, so most people use it completely anonymously.

Cannot be tampered.
Once the block is confirmed to be on the chain, all the data in the block cannot be changed to ensure that all transfer records are correct (one exception is the 51% attack, we will write another article to explain this)

3. What are the advantages and disadvantages of current blockchain technology?

  • advantage
  • Automated transaction execution allows many applications to remove the cost of the middleman
  • Is a technology with complete data transparency
  • As long as there is an internet connection, you can do transactions without interference
  • Disadvantage
  • Because anonymity is used for money laundering and crime
  • At present, it is not possible to achieve a situation where safety, scale and execution efficiency are all satisfied
  • Technology impact and popularity are not high

4. What are the popular applications of blockchain 2021?

The decentralized finance that banks and the financial industry started from 2019 to the present provides fully transparent deposit and lending mechanisms, such as Compound, AAVE, etc. Depositors can deposit assets on the platform and will issue interest every 15 seconds. The borrower can directly mortgage the loan from the platform, which is completely transparent and automates the deposit and borrowing process. Centralized banks also include Celsius and Nexo, which have changed a lot from the past.

Currency and value storage
Bitcoin is most often used as an analogy to digital gold as a value storage intermediary. At present, the cryptocurrencies XRP and XLM, which are also born in response to international remittances, are US dollar stable currencies USDT, DAI, etc. each worth one U.S. dollar. Both are currency applications that currently try to connect virtual currency to the real world.

Supply chain management
IBM uses blockchain for food traceability. Buyers can use blockchain technology to ensure that the data on the chain cannot be tampered with, and every transaction will be completely recorded on the chain.

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