Everything you need to know about BlockChain technology

Over the past few years, you've constantly heard the term "blockchain technology", probably relating to cryptocurrencies. In fact, you may be wondering “ what is blockchain technology?

As blockchain continues to grow and become more user-friendly, it is your responsibility to learn this evolving technology to prepare yourself for the future. If you are new this article will tell you more about blockchain. Some Social Media today are also evolving on the blockchain.

In this article, I tell you everything you need to know about blockchain technology. You'll also learn how it works, why it's important, and how you can use it to advance your career.

Let's go

???? What is Blockchain?

The blockchain, sometimes called Distributed Ledger Technology (DLT), makes the history of any digital asset unalterable and transparent through the use of decentralization and cryptographic hashing. 

A simple analogy for understanding blockchain technology is a Google doc. When we create a document and share it with a group of people, the document is distributed instead of copied or forwarded. This creates a decentralized distribution chain that gives everyone access to the document at the same time.

No one is stuck waiting for another party's changes, while all documentation changes are logged in real-time, making changes completely transparent.

Blockchain is a particularly promising and revolutionary. It helps reduce risk, eliminate fraud, and provide transparency in a scalable way for a myriad of uses.

???? How does the blockchain work?

The whole point of using a blockchain is to allow people, especially those who don't trust each other, to share valuable data in a secure and tamper-proof way. Blockchain consists of three important concepts: blocks, nodes and miners.

✔️ The Blocks

Each chain consists of several blocks and each block has three basic elements:

• Block data.
• A 32-bit integer called a nonce. The nonce is randomly generated when creating a block, which then generates a block header hash.
• The hash is a 256-bit number married to the nonce. It must start with a large number of zeros (i.e. be extremely small).

When the first block in a chain is created, a nonce generates the cryptographic hash. The data in the block is considered signed and forever bound to the nonce and hash unless it is extracted. 

✔️ The Miners

Miners create new blocks on the chain through a process called minage. In a blockchain, each block has its own nonce and hash, but also refers to the hash of the previous block in the chain, so mining a block is not easy, especially on large chains .

Miners use special software to solve the incredibly complex mathematical problem of finding a nonce that generates an accepted hash. Since the nonce is only 32 bits and the hash is 256, there are about four billions of possible nonce-hash combinations which must be extracted before finding the correct one.

When this happens, the miners are said to have found the “golden nuncio” and their block is added to the chain. Making a change to any block earlier in the chain requires re-mining not only the block with the change, but all blocks that come after it.

This is why it is extremely difficult to manipulate blockchain technology. Consider this a “math safety“, because finding golden nonces requires a huge amount of time and computing power.

When a block is mined successfully, the change is accepted by all nodes in the network and the miner is rewarded financially.

✔️ The Knots

One of the most important concepts in blockchain technology is decentralization. No computer or organization can own the channel. Instead, it is a ledger distributed through the nodes connected to the chain.

Nodes can be any type of electronic device that maintains copies of the blockchain and maintains the operation of the network.

Each node has its own copy of the blockchain and the network must algorithmically approve any newly mined blocks for the chain to be updated, approved and verified.

Since blockchains are transparent, every action in the ledger can be easily checked and visualized. Each participant receives a unique alphanumeric identification number that indicates their transactions.

The combination of public information with a system of checks and balances helps blockchain maintain its integrity and build trust among users. Essentially, blockchains can be thought of as the scalability of trust through technology.

???? Why is Blockchain popular?

Suppose you transfer money to your family or friends from your bank account. You log in to online banking and transfer the amount to the other person using their account number.

When the transaction is completed, your bank updates the transaction records. Sounds simple enough, right? There is a potential problem that most of us overlook.

These types of transactions can be manipulated very quickly. People who know this truth are often reluctant to use these types of transactions. Hence the evolution of third-party payment applications in recent years. But this vulnerability is basically the reason Blockchain technology was created.

Technologically, Blockchain is a digital ledger that is gaining a lot of attention and traction recently. But why has it become so popular? Well, let's dig into it to understand the whole concept.

???? The Benefits of Blockchain

Operations often waste efforts on duplicate recordkeeping and third-party validations. Blockchain therefore offers these advantages:

✔️ Greater confidence

With blockchain, as a member of a members-only network, you can be assured that you receive accurate and timely data, and that your confidential blockchain records will only be shared with members of the network to whom you have specifically granted access.

✔️ More security

Consensus on data accuracy is required from all members of the network, and all validated transactions are immutable as they are permanently recorded. No one, not even a system administrator, can delete a transaction.

✔️ More efficiency

With a distributed ledger shared among members of a network, time-consuming record reconciliations are eliminated. And to speed up transactions, a set of rules – called a smart contract – can be stored on the blockchain and executed automatically.

???? Blockchain Types

There are four different types of blockchains. They are the following:

✔️ Private Blockchain Networks

Private blockchains operate on closed networks and tend to work well for private companies and organizations.

Businesses can use private blockchains to customize their accessibility and permissions preferences, network settings, and other important security options. A single authority manages a private blockchain network.

✔️ Public Blockchain Networks

Bitcoin and other cryptocurrencies originate from public blockchains, which have also played a role in popularizing distributed ledger technology (DLT). Public blockchains also help eliminate certain challenges and problems, such as security breaches and centralization.

With DLT, data is distributed across a peer-to-peer network, rather than being stored in a single location. A consensus algorithm is used to verify the authenticity of the information; proof of stake (PoS) and proof of work (PoW) are two frequently used consensus methods.

✔️ Authorized Blockchain Networks

Also sometimes known as hybrid blockchains, permissioned blockchain networks are private blockchains that allow special access to authorized individuals.

Organizations typically set up these types of blockchains to get the best of both worlds, and this allows for better structure when allocating who can participate in the network and in which transactions.

✔️ Blockchain Consortium

Similar to permissioned blockchains, consortium blockchains have both public and private components, except that multiple organizations will manage a single consortium blockchain network.

Although these types of blockchains may initially be more complex to set up, once up and running they can provide better security. Additionally, consortium blockchains are optimal for collaboration with multiple organizations.

???? Where to study Blockchain?

Although it is a relatively new technology, there are multiple resources with which we can begin to learn more about this field. Take note of where you can study!

✔️ Best Blockchain Books

The Blockchain Developer is a very interesting book for anyone who wants to deepen the technical aspects of the Blockchain to start new projects or continue existing projects. The author is Elad Elrom and it is a practical guide to designing, implementing, publishing, testing and securing blockchain-based projects.

Blockchain: The Industrial Revolution of the Internet is a book coordinated by Alex Preukschat and produced with the collaboration of professionals such as Carlos Kuchkovsky, from BBVA, Gonzalo Gómez, from IECISA, Daniel Díez, from Everis, and Iñigo Molero, from OroFinanzas.com.

This book tells how the appearance of the blockchain in 2009 gave birth to a new economic model based on the decentralization of trust, where we can all exchange goods and services without the need for third parties.

The Book of Satoshi is a well-known work by Phil Champagne and brings together the writings and exchanges of opinions conducted by Satoshi Nakamoto over two years. In 2008, Satoshi Nakamoto published his study and a few months later, he launched the Bitcoin network, the seed of an entire industry now known as blockchain.

Cryptoassets is an innovative investor's guide to an entirely new asset class. The authors are Chris Burniske and Jack Tatar. With the rise of bitcoin technology, investors have many more opportunities to invest online.

Blockchain Revolution is a book by Don Tapscott and Alex Tapscott. Father and son say blockchain will shape the next era of prosperity – in finance, business, healthcare, education, and governance, among others.

✔️ Blockchain Blogs

EthereumDev is a blog that tells you everything you need to know to start developing in the world of Ethereum. From the writing of the first smart contract testing and interacting with the blockchain with JavaScript. Ideal for studying Blockchain.

IBM also has the blog Blockchain Pulse specializing in Blockchain where it gathers all kinds of industry information, both news and conversations, stories and opinions from experts in the field.

decrypt is a site dedicated to builders and contractors Web3. The objective of this medium is to offer readers a set of tools to understand the fundamentals of the industry.

CoinDesk is the media platform for the next generation of investors exploring how cryptocurrencies and digital assets are contributing to the evolution of the global financial system. Its goal is to inform, educate and connect the global investment community through news, data, events and education.

Cointelegraph is the leading digital media resource covering a wide range of news on blockchain technology, crypto assets and emerging fintech trends. Every day, it publishes the latest news from the decentralized and centralized worlds and is a good option to study blockchain.

Alastria is a non-profit association that promotes the digital economy through the development of decentralized Blockchain technologies. It is a multi-sectoral organization that generates and shares knowledge, with a collaborative spirit, evolving with a common vision and objective.

✔️ Blockchain Tools

Truffle is an Ethereum blockchain framework designed to create a development environment to facilitate the development of Ethereum-based solutions. Additionally, it also includes a massive library that supports writing new smart contracts.

Metamask serves as a connection between a browser and a Ethereum blockchain. Additionally, it also provides a software platform to serve Ether and other assets ERC-20. Dappradar is a web browser extension or plug-in that allows users to easily interact with DApps from Ethereum.

Geth is an Ethereum node implementation based on the Go programming language. You can use it in three different interfaces: interactive console, JSON-RPC server, and command line.

Mist is currently the perfect choice for implementing smart contracts and is also a complete node wallet. The amazing factor of Mist that makes it one of the best blockchain tools is the Ethereum tag on it.

🌿 The 5 largest blockchains

✔️ Ethereum (ETH)

Ethereum is a blockchain protocol imagined by Vitalik Buterin, a Russian-Canadian developer. Blockchain is a technology that allows information to be stored and transmitted in a transparent, secure manner and without a central control body.

Launched in 2015, Ethereum, the second blockchain in terms of valuation after Bitcoin, allows the development of decentralized applications, called Dapps.

It is different from Bitcoin, which is only focused on peer-to-peer payment. Tens of thousands of developers are building apps on Ethereum for the finance, entertainment, cloud, and real estate industries. The Ethereum blockchain developer community is one of the largest and most active in the world.

Ethereum is the leading blockchain with $184,28 billion TVL across 375 protocols. He is ranked #2 by market capitalization with $450,22 billion. Its Mcap/TVL ratio is 2,89927, which indicates that the capitalization of ETH is almost 3 times the total amount invested in the network.

The main protocol is the Curve Decentralized Platform (CRV). Its TVL is $22,4 billion and an Mcap/TVL of 0,09024. Its dominance is 12,16% over other blockchain protocols.

✔️ Binance Smart Chain (BNB)

The Binance Smart Chain (BSC) can be described as a blockchain operating in parallel to the Binance Chain. Unlike Binance Chain, BSC allows you to program smart contracts and is compatible with the Ethereum Virtual Machine (EVM).

Its objective is therefore to leave intact transaction speed of the Binance Chain while introducing smart contracts into their ecosystem.

In fact, the two blockchains operate together. We can take the trouble to note that BSC is not a solution to the problem of the scalability of the type layer two or off-chain. It is indeed an independent blockchain that could function even without the Binance Chain.

That said, the two channels bear a strong resemblance in terms of design. Learn more about the difference between Binance Smart Chain and Binance Chain.

Binance SmartChain ranks second for total value locked, with $20,68 billion TVL spread across 246 protocols. Binance Coin ranks third in terms of market capitalization with $88,63 billion. Its Mcap/TVL ratio is 5,24438, which indicates that the BNB capitalization is more than 5 times the total amount invested in the network.

The main protocol is the PancakeSwap decentralized platform (CAKE). Its TVL is $8,03 billion and an Mcap/TVL of 0,3806, with a 38,83% dominance over other blockchain protocols.

✔️Terra (LUNA)

Terra is the third largest blockchain by total value locked. Its TVL is US$18,29 billion on just 14 protocols. It is the chain with the fewest protocols among the top 5, always reaching a high investment value.

Terra ranks at 9th rank in terms of market capitalization with 31,38 billion US dollars. Its Mcap/TVL index is 1,73468, which indicates that the capitalization of LUNA is less than 2 times greater than the total amount invested in the network. Be the lowest index among 5.

The main protocol is Anchor (ANC). Its TVL is $8,51 billion with an Mcap/TVL of 0,07695. It has a 46,53% dominance over other blockchain protocols.

✔️ Avalanches (AVAX)

Avalanche is the fourth largest blockchain by total value locked, with $14,31 billion TVL across 117 protocols.

Avalanches (AVAX) ranks 11th by market capitalization with 25,94 billion US dollars. Its MCap/TVL ratio is 2,16989. This indicates that the capitalization of AVAX is about twice the total amount invested in the network. It has the second lowest rate among the 2.

The main protocol is Aave (AAVE). Its TVL is US$3,16 billion and an Mcap/TVL of 1,06539, with a 22,08% dominance over other blockchain protocols. To be the main protocol of the largest MCap/TVL among others in this field.

✔️ Left (LEFT)

Solana is the other great blockchain we can have. It ranks number 5 in total value locked, with a TVL of $11,59 billion across just 41 protocols.

Solana ranks at 5th in terms of market capitalization with 54,16 billion US dollars. It has an Mcap/TVL ratio of 4,69662. Which indicates that the capitalization of SOL is more than 4 times greater than the total amount invested in the chain. Which could indicate an overvaluation of the token, just like in BNB.

The main protocol is Raydium (RAY). It has a TVL of US$1,59 billion and an Mcap/TVL of 0,34154, with a 13,59% dominance over other blockchain protocols.

???? In summary

At the end of this overview, we realize that blockchain is much more than a technological innovation : it carries the seeds of a real revolution. Thanks to its properties of decentralization, transparency and security, it opens the way to new paradigms for exchanges between individuals, even beyond cryptoassets.

Concrete applications are only beginning to emerge, whether they are optimized supply chains, tamper-proof electronic voting or shared medical records. And only future progress in terms of scaling and user experience will make it possible to generalize these use cases.

But the potential is real for blockchain to keep its promises of an Internet of value, where trust is intrinsically built in the exchange. Alongside other emerging innovations such as artificial intelligence, there is no doubt that this technology will have a key role to play in building the world of tomorrow.