A blockchain is a database that stores the history of all transactions between its members since the blockchain’s birth. This database is safe and distributed; it is shared by its many users without middlemen, allowing everyone to verify the chain’s authenticity.
As a result, a blockchain may be compared to a public, anonymous, and tamper-proof ledger. Imagine “a very enormous notebook, which everyone may read freely and for free, on which everyone can write, but which is impossible to erase and indestructible,” argues mathematician Jean-Paul Delahaye.
How Does the Blockchain Work?
Any blockchain network must use programmable currencies or tokens. A programmable currency such as Bitcoin is an example.
Transactions between network users are classified as “blocks.” Each block is validated by nodes in the network known as “miners,” who use mechanisms that differ depending on the kind of blockchain. This process is known as “Proof-of-Work” in the Bitcoin ledger, and it consists of solving computational tasks.
Once verified, the block is timestamped and put on the ledger. The transaction is then accessible to both the recipient and the rest of the network.
What are the possible uses for the blockchain?
Although blockchain technology is still in its early stages, some applications are already in use.
Food traceability is one of the first use cases where blockchain technology was applied. Carrefour is one of the precursors, with its QR code applied to various types of food that allows you to learn everything about the product’s provenance (origin, name of producer, date of packing, and so on).
Blockchain has also shown its potential in the finance industry with the development of applications including the usage of global currencies (Bitcoin, Ether, and so on) as an international standardized currency and a possible safe haven for populations that are prone to inflation or are unbanked. Asset tokenization is the process through which valuable assets are tokenized (real estate, video game collectibles, works of art, etc.).
A new network, the decentralized web, as well as a new digital economy, the token economy, are enabled by blockchain technology. It is critical to avoid misconceptions about crypto assets, which are at the center of this revolution, in order to comprehend its stakes.