Blockchain frequently asked questions – The formation and arrangement of bitcoin remain an undeniable puzzle for newbies, “wannabe” and prospective investors.
The bitcoin market has leaped to the zenith, can only get better with latest and new entrants who by every standard want to make the most of the market.
Are you a bitcoin/crypto newbie, considering having a stint with the crypto industry, but somehow confused with latest terminologies and connotations as used in the industry?
If the above in any way sounds like you, then, here is a perfect guide that’ll explain all your puzzles in the most elementary way to aid your understanding and better appreciation of the industry.
Without further ceremony, let’s get down at once…
What is Blockchain?
When you hear blockchain in bitcoin or cryptocurrency, it directly suggests a data base where electronic information and records are kept. Not only that, in a blockchain, information are built into blocks.
There usually exists a successive layer after another, this is to produce literarily a chain formation that holds the bulk together as an entity.
This means to say that while bitcoins are being produced in the process of mining, they are being placed into regular shapes, which produce a chain that holds and binds the coins together.
It is noteworthy to understand that the block formed as a result of mining has a storage capacity, when such capacity is met, it directly chains into the existing block and the circle continues.
Hope that’s clear? Good.
Blockchain is a revolutionary technology giving to the fact that it plays a vital role in eliminating risk, shuts out fraud and makes for openness and transparency in the administration of bitcoin/cryptocurrency.
What is Blockchain technology/software?
This can be seen as a Distributed Ledger Technology, which ensures that the history of digital asset is not altered or manipulated in any form.
This can be achieved by simple means of decentralization and cryptographic hashing.
In Blockchain technology, all components work at the same rate individually without any part having to wait for another to consummate transactions before they could take turn.
Every user consummates transaction from his/her end without hitches or protocols making a case for queue.
Now listen, the major essence of establishing a Blockchain is to enable users who do not trust one another to share data in a secure and tamperproof way.
The basic understanding of Blockchain and its technology requires a detailed approach to further understand what actually makes up the system as being accepted.
What are the benefits of Blockchain technology?
It has been found that both the global and local enterprise benefit from blockchain technology numerously.
The benefits include but not limited to;
- Safe and unique data coordination
- It resists external attack
- Hosted on shared IT infrastructure etc.
- Blockchain frequently asked questions: How does Blockchain works?
You may not really understand the working dynamics of Blockchain without knowing the key components that enhance its functionality.
There are basically three components namely;
- Nodes and
Blocks: A block in a chain contains a number of multiple blocks housed in three basic elements.
These elements are;
- The data
- The nonce and
- The hash
The data is in the block
The nonce is generated the moment a block is created, from this point the block header hash is formed. Additionally, the nonce contains 32-bit while number.
The hash is an extension of the nonce with wedded into 256- bit.
Note ably, whenever the block is created, a nonce generates the cryptographic hash, while the emerging data is tied to the nonce and hash forever.
Nodes: This is the decentralization attribute of a blockchain, nobody owns or can claim ownership to the chain. It’s instead a distributed ledger through the nodes connected to the chain.
Miners: It’s miners that mine and create new blocks on the existing chain following a process called mining.
Miners use special software to solve complex math problem of finding a nonce that generates an accepted hash.
What is a Blockchain system?
A blockchain system is a feature contained inside a blockchain, this embodied algorithm and cryptographic functions of any blockchain in question.
What is a blockchain application?
This can also be referred to have similar resemblance with the software applications, with a slight difference in the sense that blockchain application has a decentralized structure.
It has a cryptoeconomic system that enhances security.
Blockchain frequently asked questions: What is Blockchain revolution?
Blockchain revolution is considered a movement that brings about disruptive technology giving to its ability to;
- Keep information in safe custody without third party interference
- Eliminate intermediaries
- Unlock digital assets and finally
- Throw up the global economy for huge participation, which in turn brings about financial prosperity.
The ability to bring the new normal by disrupting the old order in series of movement is called the blockchain revolution.
What is Decentralized finance (DeFi)?
DeFi is the process whereby financial activities are decentralized in a blockchain network.
Specifically moving away from the old centralized financing, where traditional means apply by controlling the activities of money.
Alternatively in a Decentralized finance, money is being transmitted from pear-2-pear in the blockchain network without the interference of an intermediary, or governmental monetary policy of any kind.
This is a growing sector of the cryptocurrency industry, aimed at disrupting the conventional monetary space controlled by the government.
What exactly is a blockchain time?
There’s virtually a time for every operation that takes place in a blockchain, depending on how long it takes to add a block to a chain.
That said, a blockchain time is the exact extent or period it takes for a single block to be added in an already existing blockchain.
Blockchain frequently asked questions: What is a blockchain wallet?
Typically, understand a blockchain wallet as a digital wallet that avails users the opportunity to store or manage their bitcoin holdings, interestingly “blockchain wallet” is a product of blockchain.
What is blockchain programming?
Blockchain programing refers to series of activities undertaken by programmers with reference to blockchain with an aim to further strengthen its security network and cryptography.
To be a blockchain programmer, you should first and fore most be a blockchain expert.
Programing here is a direct computing activities aimed at a certain output, within a network system
What are the types of blockchain?
There are evidently two types of blockchain, namely “The public and private blockchain.”
What is private blockchain?
You may not understand a private blockchain without a highlight on public blockchain itself as they complement each other.
A public blockchain is an open network distributed and decentralized, sequel to this, transactions are recorded as blocks and interlinked to form a chain.
All transactions consummated are public and all nodes are evenly equal.
While a private blockchain is an invitation –only network controlled by a single entity.
Everyone can access the public blockchain, entrance to the private blockchain requires permission to read, write or audit the blockchain itself.
Additionally, with private blockchain, organizations employ distributed ledger technology without making the data public.
Blockchain frequently asked questions: What is Baas?
You probably might have been seeing the acronym “Bass’ without really getting to terms about it.
Well it simply means “Blockchain as a Service.”
Now businesses can rent blockchain infrastructure in the cloud, since technology is now available for rental.
This is easily interpreted since the software and hardware required to run blockchain applications are managed and hosted by service providers.
Can blockchain be hacked?
It’s difficult to tamper with or modify a blockchain, given to its digital codes stored in a shared database which provides protection for the data against being deleted.
While blockchain is an influential technology of our time, it’s however not totally immune to attack.
What is proof of work in blockchain?
Proof of work is an important aspect of consensus algorithm which involves solving of mathematical puzzle, where a miner who finds the solution receives miner reward.
Additionally, proof of works is used in forestalling double spending in blockchain.
What is double spending in blockchain?
In a broader perspective, double spending is a practice where same money is being spent more than once for different values.
The mechanism and technology surrounding proof of work makes it difficult for a double spending to occur.
Here lies blockchain frequently asked questions, you sure had learnt a thing or two from your previous puzzle, are there concerns or puzzles you’d like to be cleared on? Do use the comment box.