So, I was watching a bit of a YouTube video the other day of a new cryptocurrency that was released and I was amazed at how fast everything was being talked about. For example, the video had a picture of Bitcoin. I read that one day it would be the same as Gold which is the only other coin that has been as big as Bitcoin. Then it was about this other coin that the video was talking about, Ethereum.
Ethereum can be thought of as the first blockchain platform, and that is because it is built on a decentralized network of computers that are called Ethereum nodes. These nodes store data on the blockchain, and when the blockchain grows large enough, the nodes are able to process the growing block. The process is similar to a database, and the Ethereum nodes are responsible for ensuring that the block is valid, that all the data in the block is correct, and that there is no malicious intent in creating it.
You’re right. These nodes are actually very powerful, and because they’re based on Ethereum nodes, you can actually do the math for your blockchain. You can just use the Ethereum blockchain to transfer data to the blockchain, and a Bitcoin network is just the most powerful way to transfer data at a scale that’s very close to one-by-one. (There are other bitcoin networks that can also be used to transfer data from one node to another.
Cryptocurrency is still in a very nascent state right now, though, so there is a lot of risk of getting it hacked.
So, yes, the blockchain is a huge, important part of the game. It allows you to transfer data from one side of the network to the other, and as of now it only lets you use it to transfer one block at a time. The best part of this is that you can actually transfer multiple blocks at a time. The challenge here is that the whole entire world can be mined at once, but it’s very hard to get all of the computers to use the same blockchain.
What’s interesting is that the blockchain is not truly decentralized. That’s because every computer in the world can be a miner, and there is no way for the network to know which computers are legitimate and which are not. So we have to use a system called “proof of work,” which is basically using some type of cryptographic hash function to verify that you’ve got the correct number of inputs. The more hash functions you use, the more secure your algorithm is.
proof of work is the perfect way to ensure that a new blockchain is secure. Since the blockchain is basically a big list of transactions, there are too many people who can modify the blockchain and not make it completely unreadable. So if one computer (or indeed, one computer in the world) modifies it in such a way that someone else can detect the modifications, then the network has to stop everyone else from mining. This is called “forks”.
Of course, the more secure your algorithm is, the more likely you are to find an attack. One thing that you do not want to do is to take an algorithm that is so good it is practically indefensible and make it so that it is not secure. The reason for this is that this creates a situation where a malicious attacker would be able to attack the network with a very different algorithm that is still very secure.
A great example of this is the “Ethereum fork.” By using different algorithms on the network, a malicious attacker is able to create a network that is very similar to the one used to mine Ethereum, but does not use the most secure algorithm.