Decentralisation and decentralised networks can be compared to the ocean – it offers endless possibility and freedom of choice. Decentralisation puts the power in the hands of many; distributing the power among all the members of the community (or network).
Cryptography and network security aim to provide data integrity, data authentication, entity authentication, and nonrepudiation. Blockchain is built upon these principles.
A distributed ledger is simply a database that exists across several locations (scattered) and among multiple participants (called nodes) across a large network of computers at the same time.
Blockchain is part of a suite of DLTs that can be programmed to record and track anything of value. Blockchain is essentially a shared database filled with entries that must be confirmed (verified) and encrypted. Blockchain is built around cryptography, and cryptography enables the sharing of information in the presence of adversaries.
If we have consensus as a sailing crew, then we all agree on the route we will take, so consensus is agreement and mutual approval. The blockchain establishes an agreement between all the participants in the network to determine who in the network is allowed to append a block to the chain.
Blockchain structures generally fall into three categories ; public, private and consortium (hybrid) blockchain architectures. Before we get into the specifics of each category, there are two things to know.
Bitcoin relies on Proof-of-Work. The concept “proof-of-work” was first introduced as a type of consensus system in the network to slow down the rate of block-creation. Proof-of-work is a mathematical problem that needs to be solved.
We would be able to compare blockchain development platforms to the wind, and the way it drives and empowers a sailing vessel. Although the vessel can steer itself, the wind provides a momentum that has a direct impact on the movement of the vessel.
Smart contracts are exactly the same as any type of contract you already know. The only difference is, they are completely digital. A smart contract is a computer program that runs on a blockchain.
A good place to start is to differentiate between Fiat currencies and crypto currencies. You might not have heard about Fiat currencies before, but this is the name for the money you use every day.