Bitcoin, Cryptocurrencies, Public chains - Steemit Crypto Academy Season 5 - Homework Post for Task 5
Namaste Steem Family,
This is @cryptogecko. I hope everyone is doing well in their lives and I wish you a more prosperous future. Also, a very happy new year in advance as only two days are left now of this year.
In this assignment, I have chosen to focus on the third question. Our discussion will focus on the public chains, and their advantages and disadvantages.
The question put up by the professor is:
What is a Public Chain and What are the Advantages and Disadvantages of a Public Chain?
There are many different forms of blockchain technology that can be used for different purposes. Public blockchains, private blockchains, and federated blockchains are the three most popular blockchain technologies. However, each differs from the others in some way.
We may be able to develop a blockchain-based solution, but if we aren't aware of how each of these types affects our business models, then it will be extremely difficult to come up with a solution.
We will explore public blockchain ecosystems as a part of this assignment. Furthermore, in order to better understand the concept, we will define public blockchains first, after that, we will be looking at all the advantages and disadvantages of public blockchain technology, then we will investigate an example of this type of technology. Here are some things we should know about this technology.
Unlike private blockchains, public blockchains are open and anyone can join them without specific permission. All members of this network can read, write, and participate in the network, which is not controlled by any one person or organization.
Unlike a private blockchain, a public blockchain is more transparent and decentralized since anyone can join, and no single entity has control over the network. Most public blockchains are however limited in their scalability due to their slow transaction speeds. Furthermore, a public blockchain is not as flexible in terms of consensus mechanisms as a private blockchain.
A number of similarities exist between private and public blockchains. In both of these technology networks, all nodes have an exact copy of the ledger, their stored data cannot be changed, and their validators ensure that transactions are legitimate.
Access to blockchains that are publicly accessible is not restricted. Every person with an Internet connection can connect to the network and begin validating blocks and transmitting transactions. Most of these networks reward users for validating blocks with incentives.
A consensus algorithm such as the "Proof of Work" or the "Proof of Stake" which are some of the many consensus algorithms is usually used to validate transactions in the network. These types of blockchains are deemed to be 'public' in the true sense using these consensus algorithms.
Although blockchain and cryptocurrency words have attained popularity in the past few years, the technology is more than a decade old. The story behind the development of the first blockchain technology is also very famous and known for its impact on the world economy.
An anonymous individual named Satoshi Nakamoto first came up with the idea and developed the model in 2009. Many consider this to be the first blockchain technology. Blockchain technology was later embraced by enterprise companies, which refined the nature of decentralized ledgers and introduced private blockchains.
You can download a public blockchain protocol at any time, and you don't need anyone's permission to do so. Many new blockchain projects have started their journey by copying the whole original code from the Bitcoin blockchain as it is available for the public to see and use as they see fit for their purpose.
Public blockchains are in a way representative of the ideal business model which makes the technology industry so lucrative. While public blockchains cannot be modified by third parties, private blockchains can be modified by the organization that owns them.
A public blockchain eliminates the need for third-party involvement. The blockchain follows its own natural flow, much like a river does. There is no one in charge of the flow paths, yet everyone utilizes them. Is there a simple method for defining public blockchain technology? The answer is yes. A digital public ledger can be defined as a decentralized, autonomous, self-governing public ledger.
Public blockchains are, in my opinion, similar to democracy - of the people, by the people, and for the people!
Advantages of a Public Chain
A greater sense of transparency
A consensus is shared by the network's users on public blockchains. Someone might ask - what makes the public network better? Transparency would be my first answer. The very reason blockchains are regarded as the new monetization system is that they are transparent, and no one has any control over them.
From central and federal banks who controlled the nature of how transactions were made, this was a huge step up. Additionally, you must pay various fees when sending money to a recipient using traditional methods.
Moreover, all history of the transactions is kept secret, hidden from public view. Satoshi Nakamoto showed the world that traditional systems have grown too old to handle transactions in the information age.
As long as the common ledger is shared with a large crowd, everyone will be able to maintain it. As a result, transactions are more transparent and require a third party to verify them.
Decentralized Structure in the Truest Sense
The network infrastructure is completely decentralized. Therefore, each node will own an exact copy of the ledger. Their consensus algorithms enable them to efficiently update the ledger.
A decentralized blockchain offers true decentralization by removing the need for any central authority.
Empowerment of users
An electronic copy of the blockchain can be downloaded by anyone with access to the internet and can be read and modified. That means that ordinary citizens have control over their lives, not corporations!
Immutability
There is no way to alter the public network. The system can't be tampered with or money can't be stolen. All the other nodes will reject any attempt to tamper with the blocks, such as double-spending. Therefore, tax fraud and many other problems can be mitigated using this technology.
Disadvantages of a public blockchain:
Blockchain consensus mechanism: Some public blockchains, such as Bitcoin, use Proof of Work to validate a transaction through mathematical calculations. The process consumes significant resources, resulting in high costs.
In a public blockchain, you do not have to prove your identity in order to participate in the network; you just commit your processing power.
Speed: This is one of the biggest problems with some public blockchains, such as bitcoin, which processes only 4.6 transactions per second, while companies like Visa process 1700 transactions per second.
Thank you so much for reading this post.
I have used #club100 tag for this post and I will be using this tag for my future post too, the reason that whatever Steem or SBD I earned, I have powered up. Not only that but I have also powered up Steem after buying it from exchanges.
@shemul21, brother please review this one too. Thank you in advance.