What is Blockchain Technology? [A Short Thread]
The easiest way to explain it is by saying that:
Instead, it's managed by multiple people, making it a peer-to-peer database and thereby, making it decentralized. But why do we need something this complex?
To build trust.
Let's see the following example:
Imagine some friend of yours, traveling around the world, asks you $10. You say, "Yes", and you login to your bank account, and make the transfer. You text your friend saying that you wired him the money and that he'll get it soon.
But, have you seen what happened behind the scenes?
What happened was that you relied on your bank as the mediator of that transaction.
The moment you click "OK", the Bank registers the Amount and Date and places it in their internal register stating:
Wiring money from Person X to Person Y has a cost. What does this cost cover? The mediator's infrastructure costs because anytime you wire money to someone, the Bank has to keep paying for their server costs, human power, money costs, etc. But, wait a minute.
Because most of the time we don't wire money just to our friends, but rather we buy goods and services from random people, too. That's why we need Banks and other middle entities: to build trust in every transaction we make and mediate each one of those transactions. Whether it's to buy stuff on the internet or a life insurance policy.
And this is where Blockchain comes in.
Blockchain was built to serve as a mediator in every transaction we make, or in other words, to build trust. And how? By keeping a record of every transaction organized in "blocks" and all the "blocks" in a "chain". But is it just about wiring money? Not really.
So, what can we do with Blockchain Technology other than wiring money?
Some new use cases are:
- NFT marketplaces
- Personal identity security
- Secure sharing of medical data
- Supply chain and logistics monitoring
- Anti-money laundering tracking system
As mentioned above, the Blockchain isn't a server being run by one single company, instead, it runs on multiple PCs of multiple people. These people are distributed across the world. It keeps a record of every transaction, therefore, making it possible to track every transaction, which raises the questions:
Those are great questions. We will address those in the next thread! :)
Web 3: An Internet Revolution
A Crypto Series on The Ownership Economy
"I fully believe in ten years, [we] will be following people that we really identify with and just buy a lot of the stuff that they have they've curated for us." Sima Gandhi | Creator Generation
Digital Ownership Could Accelerate The Transition Of Activity From The Physical To The Digital World
In traditional Web 2.0 business models, end users typically face restrictions on products or services.
In contrast, public and decentralized blockchains allow users to store and trade their assets in a legitimate secondary market.
Public Blockchains Enable The Ownership Of Digital Assets
Non-fungible tokens (NFTs) serve as smart contracts that verify the ownership of digital assets on public blockchains. They usurp the power of centralized platforms to house, control, and verify assets.
Ethereum Has Been The Chain Of Choice For Smart Contracts Thus Far
NFTs Could Shift From Static Collectibles to Dynamic Digital Assets
Based on the evolution of the video gaming market, NFT demand for blockchain-based games and virtual worlds could exceed that for digital collectibles and art, especially as collectibles and art begin to exhibit more utility in various games during the next five to ten years.
Dynamic NFTs Create A New Type of Active Entertainment
We Believe NFTs Will Blur The Line Between Consumption And Investment
NFT buyers and sellers determine market-clearing prices on blockchains instead of data aggregation platforms, creating new forms of asset monetization.
Blockchain-Based Gaming Can Enable Entertainment And Monetization Simultaneously
Pay-to-Play models require end-users to purchase games at a fixed cost.
Free-to-Play models are replacing Pay-to-Play and unlocking a larger customer base.
Virtual goods and gaming-as-a-service are increasing the revenue upside for game developers.
Because NFTs recognize the ownership of in-game assets, they are enabling Play-and-Earn models.
NFT Projects Can Maximize The Returns To Individual Buyers And Sellers
As demand for blockchain-based assets grows, however, the cost to use the blockchain—as measured by gas fees—grows.
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