Crypto Basic 101: Understanding Blockchain Technology.

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3 years ago

Middlemen like Banks, custodial wallets and other third party apps were sometimes, if not mostly, a hassle for us to make a transactions.

But there exist a technology that can make our transactions easier without needing those middlemen and makes our transaction peer-to-peer, decentralized and easier - called Blockchain.

I will also include some helpful articles that is correlated with this article. I will put all of the links below for everyone to access it easily.

ELI5 For Blockchain Technology.

Let's have an example first using Bank;

You and your friends Apple and Ben eats in a restaurant. You will pay the whole bill and the 2 will just send the payment to you. After some time, your friends sent a payment using online money payment app but only Ben's didn't go through and reach your wallet saying there was an error.

And this could be one of the reasons:

  • The account was hacked.

  • Additional fees or charges in the transaction

  • Technical problem in the app or bank

  • Account's daily limit transfer is capped

What does this have to do with Blockchain?

This is how the idea of cryptocurrencies came to exist.

Cryptocurrency or virtual/Digital currency is running on a Blockchain Technology. And because of Blockchain, cryptocurrencies are;

  • Not in need of central authorities like the Banks.

  • Immune to hacking

  • Counterfeiting

  • And more

And the most known cryptocurrency of all is Bitcoin - so let's use it in an another example.

Let's say that you and your friends have 1 BTC each, and Apple send you 1 BTC as her payment to you. The transaction is made and created in form of the block. The details of transactions will be permanently incited in that block.

Now you have 2 BTCs after Apple paid you. And now Ben sent you 1 BTC too as his payment. The transaction made will create a new block and this linked to your 2 friends after both of them sent the BTCs.

This block or a chain of records is what we call a Ledger. The ledger is shared to your friends that acts as Public Distributed Ledger.

If Ben only has 0.5 BTC and send 1 BTC, what will happen?

Since each of you and your friends have the copy of ledger showing that Ben only has 0.5 BTC, his transaction will not go through and will eventually fail.

Blockchain can't get hacked because;

  • Every account or user has it's own copy of ledger.

  • Every data in the blocks are inscribed using complex algorithm.

There are two keys every Bitcoin user has;

The Private and Public Keys.

  • Private Key - an address used like a password to access your asset. Each user has a unique sequence of it.

  • Public Key - an address that is available for everyone to see/know.

Add-ons;

Miners - validate blocks in every transactions in the network.

Mining - a process in the network of adding block in to the Blockchain.

Proof-of-Work - a procedure of solving a very complex algorithm problem.

Helpful articles:

https://read.cash/@Kryptlook/crypto-basic-101-understanding-cryptocurrency-wallet-cc35efc2

https://read.cash/@Kryptlook/crypto-basic-101-3-basic-knowledge-when-investing-in-cryptocurrency-89d86454

https://read.cash/@Kryptlook/crypto-basic-101-understanding-custodial-and-non-custodial-wallet-d7e39c7a

Final Say.

Blockchain technology has a promising future for our financial needs and wants. The concept of decentralization plays a very important role for everyone's financial status. It might be too early but Blockchain Technology are slowly getting valued already and recognizing its worth, and I believe there will be more in the future.

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END.

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3 years ago

Comments

Well explained hahaha need ko ulit basahin para mas maintindihan ko😆

$ 0.00
3 years ago

Seriously, ang genius talaga ng naka diskubre or nakagawa nyang blockchain no. Pero sana mas marami pang maka discover sa kanya para naman ano, ma experience din nila ang fast transaction and safe transaction using blockchain.

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3 years ago

Mas genius pa kay einstein 😂

$ 0.00
3 years ago

very informative and useful, thanks for your article!

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3 years ago

Nice. Well explained and very informative. I'll save this for future reference.

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3 years ago

Wow!!! So using blockchain is now more easier than our banks this days. I was talking with someone about how frustrating banks are. So blockchain will be more preferable.

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3 years ago

This is about two years ago story when i have read first article about Blockchain and thought about why hacker do not hacked it but i come to know that the blockchain activity connect with thousand of computer and to hack the blockchain a hacker might get 10 seconds to hack.. But this is impossible!

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3 years ago

What do you mean with 10 seconds bro? Sorry don't quite get it.

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3 years ago

sorry that should be 10 minute .. i wanted to mean when ever a transaction come on block chain pool then it goes to thousand computer and many transaction wanted to have block and to create one block usually need upto 10 minute .. and if hacker want to hack the block then they need to have access on thousand computer within 10 minute then hack it but this impossible .. sorry for the mistake!

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3 years ago

Hashes naman sa sunod haha!

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3 years ago

Sa totoo lang part din sana yan sa article kaso sakit na sa ulo at mata kaya di ko na dinagdag 😂

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3 years ago

using blockchain is more convenient than having bank transactions nowadays..it's easy as 1 2 3!!

$ 0.05
3 years ago

And will be used more in the future 🙂

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3 years ago

practically right..banking will be less and less in the future

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3 years ago