What is blockchain and blockchain is innovative?
To download files from the internet, there are primarily two methods: using cloud services and utilizing P2P (Peer-to-Peer) sharing programs. These methods offer insights into how blockchain systems function.
Cloud Services: This approach involves downloading files from a central server via a cloud service. It's efficient and provides access to files as long as they remain stored on the server. However, these services are typically subscription-based and can be seen as centralized, as the hosting company has the power to remove files without user consent.
P2P Sharing: On the other hand, P2P file sharing facilitates direct file exchanges between users, bypassing a central server. Participants in this network, known as 'peers' or 'nodes,' share files directly. The more nodes that are online, the easier it becomes to access files. P2P's advantages include being free and not dependent on a central server, plus files are not easily removed. However, it can be slower and may become unsustainable if the number of sharing nodes dwindles, making it a decentralized method.
Blockchain operates similarly to P2P sharing but integrates cryptocurrencies. In blockchain networks, nodes don't just share files; they store and disseminate blockchain data and receive cryptocurrency as a reward. Without the inherent value in cryptocurrency, the nodes supporting the blockchain might gradually disappear, compromising the network's effectiveness. Therefore, the existence and value of cryptocurrency are crucial for the sustainability of blockchain operations. In essence, if cryptocurrency maintains its value, it underpins the creation of a continuously operating server system.
The rise and value of cryptocurrencies, like Ethereum, have significantly heightened interest in the storage and sharing of blockchain data. This has alleviated concerns about Ethereum's functionality ceasing in 2023. Blockchain technology's scope is vast, but its core function enables secure data transfer, free from risks of deletion or hacking.
The development of systems that allow asset transfers without advanced banking security has captivated a niche group of innovators, myself included, who are exploring new applications of blockchain. The extent to which blockchain can support groundbreaking applications beyond conventional transactions depends on these ongoing developments. Whether blockchain will be a transformative technology or just a fleeting trend is yet to be determined.
Image Source: Created with OpenAI's DALL·E
