Blockchain in the understanding of an ordinary user is interpreted as the basis for cryptocurrency, and this is really the case. But such an unambiguous correspondence cannot be called correct, since the distributed registry has many other fields of application. Due to its unique characteristics, blockchain is beginning to be used more and more actively wherever there is a need and the possibility of decentralized and secure storage of data and information. Now, there are many blockchains other than the one of Bitcoin, blockchains that have gained popularity in the market and offer their users not only new cryptocurrencies for their crypto investments, but various decentralized market opportunities as well. One of such advanced blockchains is the decimalchain.com platform offering its own token Decimal along with some other useful crypto services.
In the simplest interpretation, a blockchain can be called a registry (database), in which information is stored in the form of sequentially added blocks, while the current version of the blockchain is recorded on all digital devices that are connected to the network of this registry. Blockchain is the basis for any cryptocurrency, and new crypto investors searching for how to buy cryptocurrency and how to make money on cryptocurrency, should first get to know what is blockchain technology, and only then study some applicable systems like crypto calculators.
In fact, the structure and principle of operation of the blockchain are complicated enough to ensure data security, especially according to criteria such as protection against hacking and the impossibility of making changes to information already recorded in the blockchain.
So, we already know that a distributed registry consists of a sequence of blocks added in chronological order. The block has a simple structure: a certain amount of data (each unit of such data, or transaction, consists of information that determines the characteristics of this transaction such as date and time, amount and wallet addresses of the persons involved in the transaction), the hash of the block, as well as the hash of the previous block recorded in the registry.
A hash should be understood as a unique alphanumeric identifier, which strictly uniquely characterizes all the information content of the block. The hash is formed according to complex mathematical formulas (this is done by the mathematics section, cryptography). If at least one character is changed in a data block, no matter how large or small it is, the hash will become completely different. On the other hand, it is almost impossible to recover the actual data from the hash.
The use of hashing blocks is a guarantee that data cannot be changed, and since each block contains a hash of the previous one, this ensures the integrity of the blockchain.
How does such protection work? Since the blockchain is stored on all computers on the network, getting access to it is not a problem. But if you try to change the data, then change the hash of the block. On all other devices, this will be noticed, since the “correct” versions of the blockchain are stored there, and such an attempt will remain without consequences. In fact, the verification of the blockchain content is a separate topic for conversation, we only need to know that it works almost perfectly.
Let’s look at how the blockchain originated, having come to the popularity that it has today.
History of Blockchain Technology
One couldn’t answer the question of how to buy cryptocurrency not knowing how all the existing cryptocurrencies work. When we talk about a multi-user distributed network, the term “Internet” comes to mind first of all. But the basic protocols of the Internet do not involve the use of the network for the direct exchange of resources between any two users. Such an exchange is provided by decentralized peer-to-peer P2P networks, the appearance of which has intertwined with the development of the Internet in time. It is worth noting the projects ARPANET (1969), USENET (1979), which can be called the ancestors of peer-to-peer networks. Such networks became widespread thanks to the Napster application (1999), which allowed users to share music tracks.
To protect the information transmitted over the network, encryption was developed using the cryptographic protocols PKI and PGP (public and private keys, respectively). Public keys are a kind of user identifier. The exchange technology is as follows:
– user #1, in order to forward data to user #2, receives a public key from him;
– this key is used to encrypt the transmitted data;
– the information can only be decrypted using the user’s private key No. 2, which is known only to him.
The blockchain uses a kind of this mechanism, PGP, the essence of which is that all keys are formed in a decentralized manner (the concept of a “Network of Trust”).
Evolution of Blockchain
The first mention of a network using the principles of a decentralized peer-to-peer network dates back to 1991, when American cryptography experts, Stuart Haber and Scott Stornetta proposed a protocol for affixing unique digital tags for metadata. Such labels prevented the possibility of making changes to the information retroactively. Even then, the registry structure assumed the introduction of data in blocks.
The so-called Merkle trees were added to the structure described by Haber and Skornett, when the hash is calculated not for each record, but for their totality, combined into blocks, while each new block contains the cache of the previous one, ensuring the integrity of the entire registry. But in practice, such a mechanism was never implemented, and in 2004 this patent expired.
After a long absence of practical implementations of decentralized networks, cryptography enthusiast Hal Finney publishes the work “Reusable Proof of Work”, which became the starting point for using blockchain as a basis for storing digital money. This work demonstrated an effective way to solve the problem of double spending without violating the ownership rights of coins registered on a trusted server.
The next document expanding the possibilities of the blockchain was the work of Satoshi Nakamoto “Electronic peer-to-peer cash system”. In it, he demonstrated an improved Merkle tree structure and specified how to create a peer-to-peer network that would preserve the history of entries in the registry.
A year later, Satoshi put his ideas into practice by launching the Bitcoin blockchain, in which it was possible to mine, store and sell the cryptocurrency of the same name. This event is considered to be the appearance of the first fully functional blockchain, the implementation of which in terms of security has been so successful that the principles laid down in it are still used today.
The rebirth of the blockchain: having understood the prospects of the technology, it began to be used regardless of cryptocurrencies, although most practical implementations concerned the sphere of finance.
The year of the launch of the Ethereum blockchain, which contained fundamental changes that significantly expand the capabilities of distributed registries. Now, thanks to the appearance of a built-in programming language, developers have the opportunity to implement smart contracts and other decentralized applications into the blockchain.
The first major attack on the Ethereum network, which caused a hard fork. In the same year, hackers managed to hack the Bitfinex crypto exchange and “steal” 120 thousand bitcoins.
The EOS blockchain OS has been developed, which simplifies the use of decentralized applications within the blockchain. Japan is the first country to recognize bitcoin.
Cryptocurrencies and blockchain continue to rapidly gain popularity. A landmark milestone has been reached in the Ethereum network – the daily number of transactions has exceeded 1 million.
Blockchain continues to acquire new features. The number of startups is growing like an avalanche, there are stablecoins, memcoins, and non-interchangeable tokens.
Currently, it is no longer possible to talk about the prevailing use of blockchain for cryptocurrencies. The proof of this was the appearance of Forbes Blockchain 50, a list of the world’s leading companies using blockchain in their financial/economic activities.
Here are some successful blockchain applications:
– financial industry. The payment system based on the use of distributed networks has a number of advantages over classical payment systems: in terms of transaction completion speed, commission sizes, security and anonymity;
– retail trade. The trend of shifting sales of goods online could not but affect the blockchain. The use of smart contracts made it possible to automate operations such as transaction processing, refund, providing the same benefits: high speed of payment processing, security, confidentiality, the ability to pay with cryptocurrency, etc.;
– logistics. Logistics chains are becoming more complex, and automation in this area significantly reduces the number of errors due to the human factor. Smart contracts have a significant advantage in this sense, since the verification of the terms of delivery is carried out automatically and without intermediaries. In particular, the blockchain is already working in the FedEx delivery service, and BMW also uses it to track the movement of spare parts and materials;
– insurance. Here, blockchain benefits both insurance companies and their clients, making their relationships as transparent as possible and contributing to the organization of protection from fraudsters on both sides.
There is no doubt that in ten years the use of blockchain will become commonplace. And each of us will be a direct witness of how one of the greatest technological revolutions of the XXI century is taking place.
For ordinary users, the issues of using blockchain mainly come down to the “how to make money on cryptocurrency” and “how to buy cryptocurrency” issues. But understanding the technology that lies at the core of any crypto is one of the key factors ensuring profitability of crypto investments. Other helpful systems like crypto calculators may also be useful here.
Indeed, the introduction of decentralized networks into other areas of activity requires considerable costs, unlike crypto investments, where you can start with minimal amounts, focusing on cost change charts and crypto calculators.
However, the ways of earning are not limited to a purely speculative component: the use of smart contracts, for example, allows you to create your own tokens (for example, the DecimalChain platform using its own token Decimal) or NFT, and do not require knowledge of the functioning of the blockchain at all. And since the DeFi and dApps market is developing at a rapid pace, in the near future we can expect further expansion of the use of blockchain, including by ordinary users.
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