Blockchain: The Complete Guide for Noobs

How did the blockchain come about?

In mid-2008, it came together with Bitcoin and is cited in the paper Bitcoin: The Peer-to-Peer Electronic Cash System, by Satoshi Nakamoto. Initially, the community of developers and tech enthusiasts didn’t understand exactly how everything would work, but it wasn’t until 2009 that Bitcoin and Blockchain were officially released as open-source to the public.

The main purpose of the blockchain is to work as a chain of blocks that are created after a transaction and all data are publicly registered, even if you don’t know who the owners are. Thus, we can analyze a quote from the creator/creators(?) of Bitcoin, Satoshi Nakamoto himself: “The longest chain serves as proof of the sequence of events witnessed but proof that it came from the largest pool of CPU power. As long as a majority of CPU power is controlled by nodes that are not cooperating to attack the network, they’ll generate the longest chain and outpace attackers.”

What is blockchain?

Initially, they had understood that it would be beneficial to record transactions publicly, without intermediaries, with solid cryptography and a decentralized system. Later, students of technology, cryptography, and related subjects began to understand more deeply the enormous potential of the Blockchain.

Currently, there are several blockchains independent of Bitcoin and other fantastic technologies and protocols (Ethereum for example) that allow many applications to be created, new work opportunities are spread and the ecosystem is growing more robust and more mature. Thus, we can use the blockchain for various sectors such as healthcare, education, finance, logistics, politics, and much more. The blockchain advantages and utilities are numerous and increase the level of security, trust, and transparency in businesses of various industries.

The Key Use Cases

  • Games: discover amazing games like Decentraland, Axie Infinity, and much more.
  • Yield Aggregators: leverage your cryptocurrency earnings with the best DeFi aggregators.
  • Decentralized Exchanges: exchange tokens and cryptocurrencies without the need for KYC (know your customer).
  • NFTs: create, trade, collect, auction, and sell your art without borders and take advantage of the non-fungible tokens opportunity.
  • Protocols and Tokens: develop and create a new cryptocurrency project and enjoy the ways to use the blockchain.
  • Gambling: place bets, participate in lotteries, and play in online casinos with your cryptocurrencies.

What change does the blockchain provide?

Clearly, there are many changes brought about by blockchain innovation. In addition to many changes in the financial industry, it makes it possible for there to be no double-spending and many other alternatives to using your money or digital assets in a totally decentralized way that works by distributed computing.

The blockchain contributes immensely to making technological advances and application developments with cutting-edge encryption work 24/7 and 365 days a year without interruption. It is open for everyone to create and develop their projects. In this way, smart contracts can also cause changes to occur, and things, documents, art, designs, and contracts are registered and encrypted with complete security.

On top of that, the blockchain and all the transformation that comes with decentralized finance contribute to the monetary power being returned to the people. Thus, everyone can be their own bank, using alternative solutions to monetize their global work.

The concept of digital ledger

First, we must understand that the blockchain transaction hash code is what guarantees that the information is never changed. The hash considers all block data and guarantees the mining process (proof of work or proof of stake).

What is blockchain

Public key

The public key is used for you to receive payments, so send it to someone who wants to pay for your work. So, send your public address to receive payments, register a contract, etc. So, understand that there is a huge difference regarding the private key.

Private key

In this case, you need to keep your keys securely. After all, the private key that actually allows your wallet access to the blockchain (be it BTC, ETH, XLM and many others). Therefore, you should never reveal your private keys to anyone. The responsibility of becoming your own bank requires that people know how to make smart decisions.

Portfolio

There are several wallets these days, there are basically two types: cold wallets and hot wallets. Cold wallets are obviously more secure, after all, they are off the internet and require authentication or authorization. The security of storing your cryptocurrencies off the internet is much more interesting than protecting your assets. The best-known cool wallets are the Ledger and Trezor models.

In the case of hot wallets, they have a slightly lower level of security, after all, they are connected to the internet. But they are still handy for quick transactions and small amounts. Bitfy, Edge, and MetaMask are worth knowing. There are wallets that allow you to use cryptocurrencies for just about everything. Performing a quick search is sure to uncover a plethora of portfolios. Remember: never lose your private key.

Blockchain Transactions

Transactions in blockchain protocols allow amounts to be sent and received from person to person. That way, it’s possible for everything to happen. See the illustration taken from the Ledger.com website about what is blockchain:

Blockchain Transactions

Hash / Trades already done

The hash serves as a transaction tracker, so you can click to track progress. You can easily see how many transactions have been confirmed, the cost of fees, token details, etc. A decentralized blockchain network has many functions that allow much more than just recording transactions or smart contracts. See an example below of an Ether (ETH) transaction in Etherscan:

Hash / Trades already done

Cryptography

Encryption is essential for data security to be fully encrypted and can never be altered or corrupted. Thus, using mathematical algorithms, cryptography basically “scrambles the data” and with its indecipherable codes that are impossible to access if has not the private key. Encryption is used in several technology companies around the world, and professionals who are experts in the subject are much in demand, after all, the science of encrypting messages is an essential security mechanism to protect against risks on the web.

A brief explanation of distributed computing

Imagine multiple computers around the world and a system that enables anyone with computing power to collaborate with the ecosystem and earn rewards. The blockchain concept is illustrative, but it basically explains how the blockchain system works. This way, you will be able to understand which blocks are created every 10 minutes. In this way, bitcoins are mined and with an open and decentralized code system, its computational capacity becomes increasingly robust and free.

The difference between distributed and decentralized computing differs from centralized networks located in private enterprise data centers. Clearly, the transformative potential of the blockchain is enormous given the existing opportunity.

Conclusion

My recommendation is that you study a lot about blockchain technology, its various features, and ways. There are many free courses, hackathons, and jobs that can help you on your journey of discovery about the universe of decentralized finance and blockchain.

Thanks for reading!

—————————————————————————————-

About the author: Roney Laurent, 28 years old, Brazilian, growth hacker, tech guy, and cryptocurrency specialist. Follow now: Instagram | Twitter | YouTube | Linkedin | Publish0x

—————————————————————————————-

Resources: https://i.insider.com/5d4aedcd100a243d9c6c7217

https://www.ledger.com/wp-content/uploads/2019/10/What-is-blockchain-and-how-does-it-work-4.jpg

https://etherscan.io/

https://www.antiersolutions.com/wp-content/uploads/2020/02/Choosing-the-right-Crypto-Wallet-for-your-Business.jpg

Leave a Reply

Your email address will not be published.

Related Articles
Read More

What Are The Top DEX On Fantom Blockchain? SpiritSwap Vs SpookySwap

Among the various layer-1 blockchains aiming to capitalize on Ethereum’s shortcomings about lack of scalability, high gas fees, and others, there is Fantom (FTM), a decentralized, open-source, and permissionless smart contract protocol that allows developers to build decentralized applications (dApps), NFTs, and more on top...
Read More

XRP Vs XLM – What Does Stellar Do Better?

Each of them has made major strides in their respective objectives to become adopted for global remittances. However, Ripple remains ahead of Stellar in respect to their respective native cryptocurrencies. XRP ranks as the sixth-largest cryptocurrency in terms of market capitalization. On the other hand,...
Read More

NFTs: A Reinvention Of Art Or A Fad?

Using blockchain technology and cryptography, developers have been able to reimagine and rebuild money. Fiat money has always been inherently flawed, more so, after going off the gold standard which allowed countries to print money whenever they deemed right. After the financial crisis of 2008,...
Total
0
Share