What is blockchain?

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2021-09-28 18:21

What is blockchain?

A blockchain is a distributed database where individuals or company's running a node or wallet on the blockchain will have a copy of some or all of the database and the contents of that database retains consistency through consensus of every node storing that data. What the data is used for varies by blockchain.

Excluding a 51% attack, for the most part blockchain provides an enforced trust where strangers are able to write to the blockchain and trust that it will not be altered later, after the fact. While Blockchain provides a valuable platform of trust in a decentralized environment, it is not necessarily a value add for all data storage.  Using a non-decentralized storage solution such as traditional SQL databases provides a superior performance and throughput compared to blockchain and makes more sense where records may need to be changed often or are only being written by one party (Most applications of database usage)

.  Where blockchain accels is when multiple autonomous external people or teams need to collaborate and enforce policies, enable auditing and share data in a fashion that ensures autonomy, transparency, security & trust.

An additional value to decentralized services is that they tend to be more enduring. As long as a project has even one supporter, the network will still be alive and able to process transactions. Furthermore, a decentralized network doesn’t provide a single focal point for hackers making it pretty much impossible to perform any meaningful distributed denial of service attack against a blockchain platform. The other caveat to having a decentralized platform is that there is no way to shut down any of the services without shutting down every node in the network, across the world, making decentralized blockchain solutions highly survivable.

Using blockchain for crypto currencies was the first and largest sector by market capitalization. Crypto currencies seen as a way to provide a currency based on enforced trust of the people instead of governments. Despite digital currency being the primary use by market capitalization, smart contracts are largely gaining international corporate adoption. Smart contracts like those processed on the Ethereum blockchain represent a way to enforce business negotiations, automate processes, tokenize assets and so much more.

Blockchains have also been seeing some traction in distributed compute, AI, stroage and identification services to name a few areas.  You can see which sectors are gaining the most traction with our sector indices which also provide market dominance by sector, comparing market domination among peers with like services.  https://coinmarketflow.com/indices/global


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