blockchain
What is blockchain technology and what is its relationship to digital currencies?
1. Blockchain: to store digital currencies away from piracy and counterfeiting
2. How does the Blockchain work?
3. What are the most important elements of a blockchain?
4. Uses of Blockchain in various fields
5. What are the advantages of Blockchain? 6. What are the disadvantages of blockchain?
Blockchain technology has received wide attention over the past years, and has made a quantum leap in the digital economy, due to the protection it provides. As the information stored in this technology cannot be hacked or manipulated, and through this article we will learn about this technology and its mechanism of action and its wide uses.
Blockchain: to store digital currencies away from hacking and counterfeiting
Blockchain (or blockchain) can be defined as a technology for storing and exchanging information in a decentralized manner. It prevents data manipulation, hacking or falsification, and is particularly prevalent in digital currencies and related technologies, such as: smart contracts and non-fungible tokens.
How does a blockchain work?
The basic principle of blockchain work is not to store data on a central server and distribute it to members of the network, but to create blocks or copies of the data set and instant changes to it, such as transfers in the case of digital currencies.
What are the most important elements of a blockchain?
The blockchain network consists of several basic elements that can be explained as follows: [2] Blocks Each block contains information related to the instantaneous change in data, and - in the case of digital currencies - each block, for example, contains the latest transfers and instantaneous changes in user balances , along with other information to confirm the validity of the block. Hash is one of the one-way encryption methods, and each block contains its own hash and the hash of the previous block to maintain the sequence of blocks.
Proof of Work - according to this mechanism - whoever wants to create the new block and certify the transactions conducted within it will have to spend a lot of computing power to create the hash of the block, and the number of attempts made by the computer is attached within the basic block information; As proof that enough computing power has been spent to create it, which is the method adopted in Bitcoin and many other currencies, and the user who performs this task usually receives fees in the form of new currencies that are created with each new block or fees for certified transfers in the new block, or both together.
Proof of Stake This mechanism relies on the participation of those who own a minimum amount of shares of the virtual currency or assets that are being traded to certify the new blocks, and the participants in the process are chosen randomly, and this mechanism is related to the "staking" process, which It means that users freeze a portion of their digital currencies in order to use them to create new blocks and get benefits from that.
Blockchain uses in various fields
There are many uses of the blockchain, which are as follows: Digital currencies Blockchain technology is the main factor for the existence of digital currencies today, meaning that this technology is the one that has been relied upon since the creation of Bitcoin and it is the first digital currency, and by relying on it, it achieves several benefits, such as: the lack of the need for an intermediary Or a central authority to manage payments and transfers, and the great security that it is characterized by because of the difficulty of hacking it, and preventing the withdrawal of the same balance more than once, or what is known as double spending.
Smart contracts are defined as a type of self-application code that allows contracts between two parties without an intermediary party obligating them to implement them, and is the main factor for the emergence of many new applications of the blockchain, such as: decentralized applications, and games based on the blockchain. [4] Decentralized applications are defined as applications. It works according to the rules that are set for it on the blockchain, and it does not need a central server as is the case with regular applications, and it is not subject to change after it is uploaded to the blockchain. To a central authority acknowledging the parties' ownership of these assets.
What are the advantages of blockchain?
Blockchain technology has many advantages that make it attractive to various applications as an alternative to traditional centralized methods, and among its most important advantages are the following: [7] Security in the absence of a central server is almost impossible, as the blockchain is attacked by paralyzing its work, and mining operations make the amount of energy The computing power needed to hack it is so high that any hacking attempt that does not outpace the network as a whole is useless. Lower Costs Relying on blockchain reduces a lot of expenses related to data protection, management and storage.
A decentralized structure that provides a new method for providing content, software, and financial transactions so that you do not need to rely on large companies, and facilitates transparency and speed in various transactions.