Steemit Crypto Academy Contest / S6W1 - The Blockchain Revolution
Hello everybody.
Welcome to this post. I hope that all of you will be good and happy and enjoying your precious health with the grace and blessings of Almighty Allah. Today, I am here to participate in the week 1 contest of the SteemitCryptoAcademy and the topic of discussion is The Blockchain Revolution. So, let's start the discussion without any wastage of time.
Explain in your own words how cryptocurrencies have brought a revolution to the digital economy.
The financial world has been affected very much with the introduction of the cryptocurrency. The Cryptocurrency is actually the digital form of the currency that does not have any physical existence but it can be used for the storage of properties, advertising, online purchasing, and many more impressive purposes.
In the past or even in the present days, there are the coins and the physical paper money/currency that can be used for purchasing and all other financial activities. Then, this currency was transformed into its digital but still it was controlled by the central banks of the respective state or country. But, the cryptocurrency are much different from simple digital currency.
Cryptocurrency has bought a number of innovations in the financial world and the most important among them is the high security of the assets. There are only the digital wallets where the cryptocurrencies are held and can be used anywhere on the required commands. So. there is no need of any storage place in the physical way to store and safe them. The digital wallets are secured by the private keys that are only accessible for the owner of the wallets.
Decentralization is another important innovation of the cryptocurrency. We all know that in the traditional finance system, there are the banks where the users have to store the assets and they have to go to the banks for making transactions. In this way, the funds and transactions are under the control of the banks. But there is no such scenery in the cryptocurrency, the users do not have to take permission from any third party or central authority to proceed their transactions and store their funds in the form of cryptocurrency.
Another important innovation of the cryptocurrency in the financial world is that they can be transferred from one wallet to the other wallets within a few clicks and these transactions are stored on the blockchain and can be easily viewed whenever we need. Also, there is also no need to go the banks and go through the complex KYC verification systems. Users can make worldwide transactions even staying in their beds. So, these are very impressive revolution of the cryptocurrency in the financial world.
How is cryptocurrency a revolution, and what technology is used to run the cryptocurrency process?
The cryptocurrency is certainly a revolution the in the financial world. There are lot of aspects that could be considered to prove that the cryptocurrency is the revolution in the world. The cryptocurrency is a decentralized mean of transferring the assets from one person or party to the second one.
During the process of transferring or transacting the cryptos from one address to the other addresses, there is no involvement of the central authority between this process. The crypto assets that are placed in a wallet are also totally accessible to users and they are in their own hands which is not seen in the case of the traditional finance system.
Moreover, the world wide transferring of money has also been an issue that is totally solved with the existence of the cryptocurrency. There are many states in the world that do not have financial connection between each other, but still the users can transact the cryptocurrency between each other in those states.
The cryptocurrency is based on the Blockchain technology and which is actually a public ledger system to process the transactions and store the data permanently on the chain. This data is made secured with the help of various cryptographic elements that also prove the involvement of the cryptography technology in the smooth working of the cryptocurrency.
The blockchain technology is mostly the back bone of the cryptocurrency. The first ever cryptocurrency, Bitcoin was launched in February 2009 which was based on the blockchain technology. The most important feature of it are high decentralization, high security, high volatility and the transparency of transactions that are carried out on the blockchain.
What is the main purpose of blockchain technology and can this blockchain work without the internet?
The main purpose of the blockchain technology is to proceed out the smooth working of the cryptocurrency. Let me explain it in the simpler words, the blockchain technology has made the cryptocurrency decentralized, highly secure, immutable storage space, highly scalable and transparent mode of economy.
The transactions that are done in a blockchain are verified by the block validators and then are added to the blocks and hence one block is completed and attached with the previous block to make a long chain. The whole process is so much secure and safe that its hacking is almost impossible due to the cryptographic elements that are used.
Another important function of the blockchain technology in the cryptocurrency is to provide a worldwide system of payments. There is no need to take permission from the government of the respective country to take any transaction the other country through the cryptocurrency.
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During the creation of the first ever cryptocurrency, there was another mindset in the view of the developers to provide such a payment method where the users feel very much satisfied with the storage and the transformation of the funds from one place to the other place. Their plan is proved to be very successful with the worldwide acceptance of cryptocurrency in various states or countries.
To the answer of the question about the functioning of a blockchain without any internet source, I would like to say Yes the blockchain can exist without the presence of any active internet source. There are actually two types of blockchain on this basis.
The public blockchain is that in which the transactions are proceed and the data is stored on a public surface during the presence of the internet. While, the private blockchains are those in which the transactions are proceed and the data is stored even offline, this is done through an alternative ledger and the whole information are recorded on the chain when the system is online on internet. But, the private blockchain can work within a particular company or institution.
Explain in your own words how blockchains generate cryptocurrency. Is all cryptocurrency based on the blockchain? Explain
As we have already discussed that the cryptocurrency is mostly based on the blockchain technology, the blockchains are based on some particular set of rules and regulations that are actually called the consensus algorithms. The creation of the new cryptocurrency can be understood by understanding the working principles of these consensus protocols.
There are different kind of consensus algorithms that are implemented in different blockchains. The major consensus is the Proof of Work consensus algorithm. Whenever a transaction is carried out on a blockchain, the alert goes to the block validators that are actually miners in the PoW blockchains. These validator nodes solve the complex mathematical calculation with the use of the high level hardware devices and at last, they add the transaction to the block.
In this whole procedure, the validators are the main identities who have to done their job smoothly, so in return they are awarded with the same tokens of that blockchain, hence they new tokens are generated in this way and the whole process is known as the mining of new cryptocurrencies. In PoW, the nodes are selected on the basis of their hardware devices, in PoS, the validators are selected on the basis of their vasted/staked amount on the platform. And in DPoS, just like in Steemit, the validators are selected on the basis of their votes from the high stakeholders of the platform.
To the answer of the question about the existence of the cryptocurrency without any blockchain basis, I would like to say that the cryptocurrency can exist without the basis of the blockchain. There is a very popular cryptocurrency, Ethereum that is based on the smart contracts (semi blockchain) and their are other many techniques that can be used for the existence of a cryptocurency and all these techniques are somehow linked to the blockchain technology.
Explain some of the challenges faced when implementing blockchain technology.
Although, there are number of advantages and innovations that are beneficial in the financial world. But still, there are many complications that led to the challenges for the users, developers, as well as, the governments who are adopting the blockchain technology. Some of them are listed below.
The main challenge that the blockchain technology is facing is the lack of its adoption in various countries. It is not implemented in various stated due to its anonymous nature and thing thing effect the working capacity of the developers who are working hard for its development and adoption.
There is nothing perfect in the universe, so the same case is with the blockchain technology. There is a term known as 'Blockchain Trilemma' that is a challenge for the developers of the blockchain. They have to sacrifice one of the three unique features like decentralization, security and scalability because they are not able to exist simultaneously.
The decentralized nature of the blockchain technology is very much beneficial for the users but still there is a challenge as many ugly-minded people still use this unique feature to do various illegal activities like money laundering and black transactions, etc.
The lack of the knowledge of the blockchain technology among different public of various geographical areas is also another challenge that the blockchain technology is still facing.
Conclusions
The blockchain technology is the future of the financial world due to its large number of advantages. One of the most important advantage of this technology is its world wide adoption. Users can make worldwide and secure transactions very easily with its adoption.
The consensus protocols that are used for the existence of a blockchain are the deciding factor of the creation of new cryptocurrency in that blockchain. The miners/validators are rewarded with the new tokens and hence new cryptocurrency are added to the circulating supply of that token in the crypto space.
I would like to invite my dear friends @minikay, @pollito22, @growwithme and @faran-nabeel to take part in this beautiful contest.
I must agree with you when you said that the blockchain has brought high level of security. You are right brother. The security in which the blockchain has brought is quite a powerful one and no wonder other institutions and industries are now borrowing the blockchain security method.
With the blockchain security, our funds are safe and secure in our wallet and this is indeed a great revolution. Thanks for sharing this my friend.
Thanks a lot dear friend for your supportive comment here.
You have taken your time to share very important and valuable point s with us dear friend. I commend your work, as I have learnt some new things regarding the blockchain concept from tour work friend.
By design, blockchains are inherently resistant to modification of the data that has been recorded by means of ensuring that the hash function applied to the data results in an unpredictable output or hash.
This has well provided many benefits which includes security, and also, companies can also start accepting payments from anywhere in the world without having to worry about currency conversion rates or transaction fees.
Thanks for sharing dear friend, and goodluck in this contest.
Thanks a lot dear brother for your detailed comment and valuable addition here.
The numbers of innovation that cryptocurrency has brought is far better than those that has been brought by financial institutions. DeFi is from cryptocurrency. Indeed you have made a lot of vital points in your writing which I like so much. Best of luck to you sir.
Thanks a lot dear friend for your support.
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Hmm, crypto is annonymous as we still don't know who invented bitcoin, is it Satoshi Nakamoto or somebody witha a fake name, as the person named Satoshi Nakamoto denied it, and also we don't know about the founder of most crypto currencies.
Thank you for your precious addition.
Hello steemdoctor, I think blockchain technology still has a lot of experimenting to do before it reaches its optimal way of working, but it is on the right track. It is still a very young technology, rather it has advanced a lot for the time it has since it became noticeable, with the emergence of BTC in 2009. We have seen its birth, but we will probably not get to see its best version.
Greetings and success.
Thanks dear friend for your precious comment here.
@steemdoctor1
You have truly explained in details the above context. This crucial part got mine attention too.
I throughly concur an understand the way the blocks progressively form the chains in the blockchain. Thanks for such constructive analogy. It was really worth mine time. #steem-on
Thanks a lot dear friend.
I had an idea that wouldn't let me go until I got it to you. My name is Mateen, you don't know me yet but my invention will change your life. By connecting all these computers, our lives have been digitized to a set of data that only needs to be collected and analyzed, every word, every gesture, every transaction, the Internet, a window to the world as a source of control. was changed. A new economy was emerging, we would be its raw material, this new world would destroy everything. OUR COMMUNICATIONS OUR RIGHTS OUR PRIVACY In the age of self-style promotion, privacy is a revolutionary process, regardless of whether there is something to hide or not. Privacy is not privacy. Privacy is something you don't want the world to know. One thing you don't want anyone to know about privacy is the power to selectively reveal yourself to the world. Ho is the art of making information unintelligible except to those who have the right key to open it, so governments form their own opinions about cryptography, which in turn led to how important it was to the outcome of World War II. considered it as a weapon. And banned its export. A group of activists in the San Francisco Bay Area were very interested in promoting strong encryption for us.Cyperpunks' freedom is non-negotiable.It is above all else.Freedom is our struggle. Said that. Returned in 1993. Privacy is essential to an open society in the electronic age, we cannot expect governments, corporations or other large faceless organizations to grant us privacy for their own benefit. Privacy can't be achieved until we're all going to write it. There were many attempts to recreate various basic institutions of society using things like voting systems, digital communication systems that enabled extremely strong privacy. could enable the freedom to communicate and the freedom to send money and there were many different versions or ideas behind it such as digital cash.
control trade and you control freedom as the internet became a huge platform for trade it needed a currency Anonymous counterfeit proof with no Middleman but there was an issue double spending (the double spending problem is this idea that digital information is easy to copy and if you have a form of digital money how can you keep track of that money and make sure it's only spent once now with physical paper money when you give it to someone you no longer have it but in the digital realm you can give someone a copy of something digital a perfect copy that is indistinguishable from the original and still keep the original now there are two copies what if you then give it to someone else again)on the internet everything can be duplicated infinitely solving the double spending problem would help prevent fraud on the net copy and paste could no longer be an option without it online Commerce would be impossible.(technical problem that's why it took decades to solve Bitcoin is the result of Decades of intensive research and ideology of freedom and a desire for secure payments is the individuals who have built precursors to bitcoin but these precursors hadn't been successful if you think of it of Bitcoin as a new species of money these species died on the operating table they never really made it out of the lab and so with a cipherpunks wanted to create a digital cache but they had no idea how money worked they knew how cryptography worked but they vary had very poor understanding of Economics monetary policy and money Satoshi did)sometimes the solution appeared to be within my grasp other times it appeared entirely Out Of Reach the stock market is now down 21 it was the worst day on Wall Street since the crash of 1987. this could be the most serious recession in decades what started in America last year has now spread to every part of the world the financial World collapsed its instruments its rules the creation of wealth all one big fiction a Web of Lies and opaque algorithms the opposite of what I had been working on for years an open Universal well-ordered mathematical world.