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Most Frequently Asked Questions About BlockchainBy Divya Singh | Aug. 28, 2018, 3:39 p.m. GMT
Blockchain is probably one of the most searched topics, not only in the tech world but almost in every industry. No, this is not a rant on the potential of Blockchain. This has already been discussed nearly to death. This post is for all those people who are just getting started with Blockchain and trying to understand it.
Here are the most asked questions and their answers about Blockchain Technology:
What is Blockchain?
Blockchain is a decentralized, peer to peer, immutable storage network which is censor and regulator free. The network does not have a single controlling entity. Every data that is written gets validated and replicated across all the nodes participating in the network. Changing something which was written before in the network is computationally very difficult.
How is Blockchain going to change the world?
Blockchain technology is run by connected nodes. There is no central authority controlling the system. Since the system is decentralized, the cost involved in it decreases and efficiency increases. Any action in a decentralized system can be monitored and verified by the nodes, making the system secure. The world with Blockchain technology will be more transparent, efficient, low cost, and secure, when compared to traditional centralized systems.
Why is Blockchain so secure?
As mentioned above, Blockchain is decentralized and run by nodes present in the system. Adding data to the network needs a lot of computing power, which makes the network immutable. For more information about immutability, click here. The Blockchain network also ensures that the data entered in the system is encrypted by hashing (for more information about hashing, click here). This makes any alteration in the system next to impossible.
What is the difference between Bitcoin and Blockchain?
Bitcoin is not Blockchain and vice versa. The difference in simple words is- Bitcoin is an application built on the Blockchain technology.
Bitcoin is an electronic decentralized currency managed on a peer-to-peer network, without any dependency on a centralized third party. It belongs to an electronic class of currencies called cryptocurrency.
What are some of the non-Bitcoin applications of Blockchain?
Some of the most impressive applications are:
- Cross IoT application - It can be used to track billions of connected devices, enabling the processing of transactions and coordination between devices. This allows for significant savings for IoT industry manufacturers. The decentralized approach eliminates single points of failure, creating a more resilient ecosystem for devices to run on. The cryptographic algorithms used by Blockchains makes consumer data more private.
- DApps- Decentralized applications (or DApps) are server-less applications that can be run jointly on the client side and on a blockchain. Armed with self-executing smart contracts, proponents of the technology have envisioned ways to replace every system that requires a centralized leadership, from businesses and services to governments; and the key to executing this vision are DApps.
- Other industries which can be impacted by Blockchain are:
How is Ethereum Blockchain different from Bitcoin Blockchain?
Bitcoin is a decentralized electronic currency while Ethereum is a decentralized platform where one can build and deploy DApps and smart contracts. For more information about this, refer to this blog.
Who invented the Blockchain?
The Blockchain was invented by Satoshi Nakamoto in 2008.
Who is Satoshi Nakamoto? “No Idea”!Satoshi Nakamoto is his/her/their pseudo name. Some guesswork has been done in this blog.
How does Blockchain work?
Let’s try to understand this by understanding how a proof-of-work blockchain works. A data/transaction is added/created in the pool and the transaction is broadcasted to all the nodes. Miners will verify the transaction of data based on the previous data in the system and add in a block of transactions. They will then calculate nonce for that particular block and broadcast to all the other nodes in the system. Other miners will verify the work and add it to their ledgers, and this how the Blockchain will grow. For more information about mining, click here.
What are the types of Blockchain?