There is a lot of confusion between blockchain and bitcoin , after all, both seem inseparable. A second problem is the difference between DLT, or Distributed Registration Technology, and the blockchain itself.
Rest assured, the Bitcoin Market team has come together to create didactic and uncomplicated content so that you can develop yourself more and more in the world of crypto and real asset tokens.
DLT - Distributed Registration Technology
The technology that uses nodes in a network , capable of inputting and storing information in a semi-centralized database is not new. In this model there is no need for a chain of sequential blocks, as each new record depends on the consensus among the network validators.
These DLT systems are usually used by business partners , and have a centralized entity that checks the intermediaries and the transactions themselves, usually lawyers, accountants or banks. There is no obligation to use encryption.
Although transparency is a characteristic present in these systems, immutability is not something inherent to it . Once the validator set decides to accept changes, there is nothing that common nodes can do.
Such networks can operate publicly (open, not allowed) or privately , where there is a need to obtain permission from the set of responsible companies to participate and interact with the database.
The fewer participants have control power, the faster the changes validation decisions are made, in addition to the simpler improvements and changes to the network software itself.
Blockchain, bitcoin innovation
The blockchain is a specific type of DLT in which there is a chain of blocks ordered sequentially by a hash, an encrypted code. That is, changing any data at the beginning of the chain invalidates all subsequent blocks. Its network is fully public and auditable, including the source code that governs the system.
The DLT of the blockchain is characterized by the absence of a regulatory entity , so it is possible to have multiple versions being updated simultaneously. To resolve these conflicts, a technique called “Nakamoto Consensus” was developed , based on the Proof of Work technology.
The secret of this consensus is the ease in validating the hash solution, this algorithm that links the current block to the pre-existing chain. At the opposite end, it is extremely laborious to calculate the correct hash for each new block. As soon as the correct answer is released on the network by the miner, a race begins to continue this process.
These rules remove the incentive for fraud on the part of any participant, since blocks outside consensus are easily ignored by others. That is, there is an enormous expenditure of energy and time to generate blocks, which are easily verifiable by the rest of the network, without any expenditure.
As we can see, it is impossible to separate blockchain technology from the bitcoin network. Without proof of work, hash blocks and consensus rules, the blockchain returns to being a simple DLT, a semi-centralized database.
Different uses of blockchain
As we mentioned, blockchain does not have to be so strict with respect to the rules imposed by the Bitcoin consensus. There is a great expectation in relation to the future of the application of this technology in other areas, functioning as a kind of “digital notary”, although until now its use in the business environment remains as a promise.
A proven viable technique today are tokens, digital assets tied to an existing blockchain. Ethereum's ERC-20 model has established itself as the industry standard, taking advantage of the network protection afforded by miners, while having some flexibility in drafting digital contracts.
Real vs Digital World
The miner needs to invest in machinery, electricity, at the risk of technology changing along the way. If blockchain were used, say, to validate and store bank transactions , there would be no need for this massive investment in network security.
If any of the participants tried to enter invalid transactions, it would be enough for one of the other agents to decide not to follow this instruction, blocking a transfer of values in the “real world”.
There would be no gain for either party, as in this case the blockchain serves only as a channel of communication. The real value, dollars, reais or euros, is stored in the respective bank accounts.
Bitcoin (with a capital B), the cryptocurrency
Bitcoin currency only exists in digital form, within the blockchain . Once the record is changed, there is no way to reverse the transaction. Likewise, there is no bank account in which the amounts need to be moved. For this reason, there is a need for this large expenditure of energy and time by the miner.
Satoshi Nakamoto, whoever he was, solved the problem of “double spending”. Until then, cloning a digital file was extremely simple. Through the consensus rules for updating the blockchain, any attempts to deviate are automatically invalidated by the other participants, in a simple and inexpensive way.
How to invest in Bitcoin
One of the most practical and secure ways to obtain Bitcoins is through an exchange, such as the Bitcoin Market. We are the largest digital currency broker in Latin America, with over one million customers.
To start trading Bitcoin and other cryptocurrencies on an exchange, the first step is to register on the platform. You will have to deposit money in the brokerage account in order to be able to place a purchase order to purchase the chosen cryptocurrency.
