Blockchain: What Is It in Simple Words?
The word "blockchain" has recently become very popular, many people have heard about it, but not everyone understands what it means. We will try to explain the following things in simple words within the framework of this article:
- How blockchain works?
- Why is this technology considered a miracle of the 21st century?
- Where can it be applied?
- What problems are still to be solved?
- What is blockchain in simple words?
- What is the blockchain system and how does it work?
- Where can you apply the technology of blockchain?
- Pitfalls of blockchain
- PoW, Proof of Work.
- PoS, Proof of Stake.
Ethereum, is smart contracts. With their help, you can get rid of legal paperwork and intermediaries. There is a virtual notary (Stampery project) that certifies contracts through the technology of blockchain. We already know of several working cases of how blockchain has been successfully applied in the field of copyright protection (the Ascribe project). If we start to list all the things which can benefit due to blockchain, we will have to write the third volume of "War and Peace."
- In order to implement the technology of blockchain everywhere, it is necessary to completely rebuild huge established systems that have a lot of interested parties, and they will hinder innovations in every way. You will need a couple of years to fully switch to blockchain.
- This technology is not yet very friendly with regulators. In order for the broad masses to begin implementing it everywhere, the trust is required that is provided by the legislative framework. So far, there is no single scenario for solving this problem.
- Miners use a lot of energy to confirm blockchain transactions. In the future, when the blockchain system is implemented in a large number of spheres, the powers to maintain it will have to be many times bigger.