Experts Explain Blockchains

Experts Explain Blockchains

There is a lot of confusion about what blockchains are. In this article, we try to address some of the misconceptions surrounding blockchains and to bring clarification on the matter by turning to expert opinion

Blockchain is not the underlying technology of Bitcoin

The bitcoin blockchain is what the bitcoin network produces using an innovative consensus protocol. The novelty of this protocol lies in decentralization. A decentralized system is one where parties act independently to establish the universal truth.

Blockchains are more than simply databases

While blockchains do record and store data, calling blockchains a database is greatly underestimating them. Blockchains enable decentralized control over data. Involved parties now do not need to trust each other or an intermediary, they only need to trust the code.

Bitcoin introduced the first blockchain, a new data structure, but this is not the only thing a blockchain is. Blockchains combine cryptography, economics, and distributed systems to bring a new way of establishing the truthful chain of events.

Blockchains cannot be hacked

The bitcoin proof-of-work protocol determines consensus by measuring the amount of computational power dedicated to a particular history of transactions. To compromise such a system, a malicious party will have to control more than half of the total computational power. According to various sources, the bitcoin network consumes 1% of all the world’s energy production. This effectively means that attacking the bitcoin network will require around 1% of the world’s energy production.

It is essential that people understand blockchains are not only a new way of storing data. The real innovation is decentralized consensus, which brings data record and storage to new levels of transparency, immutability, and security.

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