Crypto is here to stay. A very recent topic I wrote on Twitter –
If you are among the people who think Bitcoin is a “bubble” or a “tulip shaped digital scam” but the technology behind it – “Blockchain” is the real deal and the future where technology is headed, then this thread is for you
Let’s understand what is Blockchain. If you are familiar with Torrenting movies and TV shows in your bedroom, you are already exposed to the building blocks of Blockchains in a very primitive form.
What is torrent? A movie or any single file is broken into a million pieces and hosted on millions of computers, and when you make a download request, those million pieces are collected in a certain sequence and converted into a single file that imitates its original form.
Remember that there can only be one sequence to assemble these million pieces, otherwise the movie won’t make sense and becomes a corrupted file, which is useless
But why go through this instead of hosting as a single file on a single server? Hosting costs money and if the server fails the file is doomed to fail. Hosting on nearly millions of computers means no downtime and costs close to nothing
If you can understand and understand this, then you already understand decentralization. Now imagine instead of just watching torrent movies, you do everything this way. This is what Blockchain enables
Blockchain does this in a very elegant and secure way, and it reminds of the “set sequence” part of the torrent, which is called the Ledger.
A ledger is a series of live data that cannot be tampered with, because the ledger itself is decentralized and hosted on a million devices.
So if a bad player decides to tamper with the data, he has to know which of the millions of devices contains that particular piece of data and alter them all at the same time.
Let’s say he manages this feat somehow, and now the moment the data is tampered with, the block will not be validated because it’s compared to millions of other devices hosting OG data. All the trouble messing around for nothing
How the hell does it affect my daily life? One obvious use case for this is in finance, where a decentralized ledger removes the systemic risks involved in banking.
Bitcoin is just the tip of the iceberg. Proof of concept at best. The value it holds is due to its early edge in the movement and being the poster boy for Blockchain for a decade. You might get rid of the gold road because of this
Smart contracts are the real deal in Blockchain. It is like a normal contract where the contract is executed if a set of agreed conditions are met. Ethereum pioneered smart contracts.
Now make this nodes decentralized, and you’ll get an incredibly powerful system to validate literally anything. Home loan, insurance, p2p lending… you get the drift.
If you’ve made it this far, kudos to you! Various coins and symbols that you hear today solve one problem or another. But it’s still early days, like the internet in the seventies. Where only facilities are built
Like every technological advancement, there are dark sides to this as well. Shitcoins or Blockchain networks promise something and invisibility is one. stay away. Knowledge is the only hedge to get rich