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What problems does blockchain solve (what does blockchain solve)

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What problems does blockchain solve (what does blockchain solve)

What problems does blockchain solve? Blockchain has its unique advantage in solving information trustworthiness problems: it can achieve immutable transactions, thereby reducing intermediaries and improving efficiency. At present, there are many application cases that have proven this point: multiple industries such as supply chain, logistics, and finance have used blockchain technology to track the source of goods and final results, and keep track of them

In essence, the blockchain is a Distributed database, which ensures the ability to securely transmit data through data encryption and storage in the data processing process and the trust mechanism between all relevant nodes. This can provide users with a more convenient and efficient way to obtain all the required product and service information. And this transparency helps to improve the quality and availability of products, enabling enterprises to manage product requirements in a more effective manner, reduce operational costs, and also help customers obtain better services

What has blockchain solved

What problems has blockchain solved Before we understand blockchain technology, we first need to understand what it is. What is a distributed ledger database? How does it work

At present, there are more than 500 nodes in the world running distributed ledger systems, including Bitcoin, Ethereum and Ripple. Each node uses the same consensus algorithm to execute transactions; Processing thousands of transactions per second, this data is recorded in real-time and cannot be changed; Each block is complete, so anyone can view its history

However, due to the great difference between different Cryptocurrency, it is impossible to determine whether they are related. But this does not mean that only a few public chains can achieve this For example, Bitcoin is a smart contract based network that can be used to manage private keys for decentralized applications, while others depend entirely on the user experience on the network. Ethereum has realized the solution of this combination through blockchain Why use blockchain? Because its working method is very simple – users need to verify their identity to join this project, and if they do not trust their code or other information, they will lose the trust of the entire ecosystem. So blockchain cannot achieve this goal

For example, Ethereum uses “Proof of Stake”, that is, people holding tokens have voting rights. When a token is destroyed, “locking” the asset is the process of obtaining voting rights (usually refers to transferring all tokens to a specific address or wallet). This eliminates the need for developers to worry about missing out on the funds available in their wallets

In addition, although Ethereum itself does not provide many functions, it does provide many use cases in some areas of the blockchain, such as security audit, privacy protection, and so on

In order to ensure the security of blockchain technology, the Ethereum Foundation has proposed an improvement proposal, namely EIP1559, which aims to improve the efficiency of cross-border transfer under the existing payment environment. The proposal also proposes the creation of a new digital token to reward the benefits and incentive plans of participants who wish to use blockchain technology for cost-effective payments. The proposal points out that over time, Ethereum may no longer have the same functions as Bitcoin

However, for most Cryptocurrency, this is a good alternative and has advantages to some extent. After all, some countries have begun to implement practices similar to those in the United States to regulate ICO and other virtual asset service providers Of course, this does not mean that all tokens will ultimately be considered securities products, but rather that a considerable portion of these two types of markets may be securities products However, on the other hand, there is another aspect worth paying attention to.

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