Blockchain For Everyone.
In this article, we will delve deeper into the concept of blockchain and explore the different types of blockchains, including public and private. We will also discuss the two largest public blockchain networks, Bitcoin and Ethereum, and their respective consensus algorithms. This article will provide a comprehensive overview of blockchain technology for readers who want to learn more about this revolutionary technology.
What is blockchain?
Blockchain is a continuous decentralized, immutable, and distributed digital ledger that is composed of blocks linked using a cryptographic hash.
What are the types of blockchains?
There are many types of blockchains, Public, Private, Consortium, Hybrid …etc but the most commonly used are Public and Private blockchains.
Public Blockchains
These are blockchains which are open for anyone to participate in as they have no central authority to choose participants so they are decentralized and mostly referred to as permissionless for example the Bitcoin Network, and Ethereum Network.
Private Blockchains
These blockchains are not open to the general public, and a single organization holds the central authority over the network. They are commonly referred to as permissioned, with examples including Ripple, Hyperledger, and Corda
Let's talk about the largest Public Blockchain Networks
As it is said, everything has an origin, there are two blockchain networks which are referred to as the genesis of public blockchain networks i.e Bitcoin Network started by Satoshi Nakamoto (2009) and the Ethereum Network started by Vitalik Buterin(2013) these two are the disruptors of the financial world, let's dig deeper into each.
Bitcoin
Bitcoin is a network which is the first decentralized currency some call it digital currency which relies on a P2P network and is denoted by a symbol BTC. Bitcoin has the highest market capitalization and the highest trading volume among all cryptocurrencies. It was created by Satoshi Nakamoto with a limited supply of 21 million Bitcoins to be mined. This makes it a deflationary currency as with time its value increases compared to fiat currencies. Bitcoin relies on a consensus algorithm known as Proof Of Work(POW) where different nodes on the network compete to solve a cryptographic puzzle to confirm transactions and add them to the public ledger, Here nodes with the highest computing power are rewarded for the work done in Bitcoins.
Ethereum
Ethereum is an open-source decentralized blockchain platform that aids in the creation of Smart contracts and decentralized applications (Dapps). It has its own cryptocurrency known as Ethereum denoted by ETH. It was created by Vitalik Buterin as an alternative to Bitcoin. In the Ethereum white papers where he describes how Ethereum would work, it was initially using the Proof Of Work consensus algorithm and in 2022 they switched to Proof of Stake (PoS) where validators or nodes have to stake Ethereum and the nodes with the highest stakes are allowed to mine a block and confirm the transactions unlike POS (Proof Of Work) which relied on compute power hence a reduction in gas fees (transaction fees) and transaction times.
In conclusion, this article discussed the basics of blockchain technology, including its decentralized and immutable nature. Its created for everyone to understand the basics of this technology
Be on the lookout for the second instalment of this series where we will delve into the practical applications of blockchain technology in everyday life. Stay updated by following me for more informative content. I hope you found this article informative and engaging.
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