What is the basic definition of blockchain (What are the basic elements of blockchain)?
The basic definition of blockchain, what are the basic elements of blockchain,
The basic definition of blockchain, what are the basic elements of blockchain, can be divided into distributed ledger, encryption algorithm, and consensus mechanism. Blockchain is a new type of database technology for Internet computers, characterized by decentralization and tamper resistance, among other characteristics.
In the application field of traditional finance, due to the lack of unified security measures and regulatory requirements, there are problems such as lack of information disclosure. What methods does blockchain use to solve this problem? Let’s take a look at what blockchain is together. The basics of blockchain: Blockchain is a technology for data storage that can record ownership data; it makes the transaction process more secure and reliable through peer-to-peer transmission; it uses Bitcoin for mining; Ethereum provides an alternative solution for Bitcoin; Ether is used to purchase goods and services and exchange them for other digital currencies; token issuance based on smart contract technology (ICO) has been successfully applied in many industries.
In a sense, we consider blockchain to be a very important technology. So, what exactly is blockchain? The core concept of this emerging technology is actually simple: it is a network system used as a unit of accounts or means of value storage that is managed by a node and has its own private key. This allows users to create new digital assets through these accounts, generate new things, and the resulting income flows to another part of the entire system. So the underlying architecture of blockchain has three important elements: 1. Trust mechanism, 2. Scalability, 3. Interoperability and sharing capabilities, 4. Privacy protection, 5. Decentralization features, 6. Anti-counterfeiting features, 7. Multivariate calculations, 8. Distributed computing, 9. Transparency, 10. Distributed organizational form, 11. Decentralized participants, 12. Disintermediation.
What are the main functions of blockchain?
What are the basic elements of blockchain
Editor’s Note: This article is from Odaily Star Daily and is authorized to be reproduced.
Blockchain technology is a decentralized database system (DLT) that provides security and immutability by storing all data in a distributed ledger; it allows information to be transmitted between multiple nodes to ensure security and verifiability, and allows participants to sign, record, and perform operations on transactions; it can also implement smart contracts, allowing data from different chains to be exchanged and shared; it can also be used to create electronic wallets based on encrypted assets, etc. This is also a basic element of blockchain, but it does not mean that its basic attribute is “disintermediation”. So, what is disintermediation? Let’s start with a simple definition: “disintermediation” means that when a person owns a specific digital currency or any other tangible goods or services, they can use these currencies to purchase goods and services without the need for a third party as a buyer or seller. In order for people to pay for their economic interests, they need to pay a certain fee. Simply put, you must exchange Bitcoin, Ethereum, and other mainstream tokens on public chains for legal currency or fiat currency. For example, if you put your BTC on an exchange, because you can exchange it for USDT, and then transfer it to someone for $1 in value. This is a peer-to-peer way. Users can usually send funds directly to whom they want. But since no one can receive the private key and mnemonic for the funds, this means that the tokens stored in the cold storage cannot be used for daily expenses, nor can they be taken out for circulation. Let’s illustrate with a few examples:
(1) If an investor wants to invest a large amount of money with their Bitcoin, their account may only have $500,000.
(2) Once the investor receives a large sum of money, there is no need to continue holding assets. For example, if an individual wants to borrow $100,000, his bank will close.
(3) If you want to borrow $100,000, you can get the credit through financial institutions such as PayPal or Alipay. In addition, it is necessary to know that if someone does not trust you, it is possible to steal your funds from the bank. This is why many companies consider entering the blockchain industry – they hope to solve a large number of pain points that currently exist, including regulatory issues, fraud, and how to deal with various challenges. Therefore, the answers to these questions are important, and below we will introduce the basics of blockchain.
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