What Real-World Impact can Blockchain Have?

While blockchain was created as a solution for the Bitcoin financial network, the concept has been adopted across a range of sectors and is expected to make a major impact in the way that we handle data storage.

You can visit out Industry Impacts section for profiles of some up and coming blockchain applications.

 

Did you know?

Blockchain systems are currently in development in every major sector of the Forbes 500 list!

What is Decentralization?

A blockchain is a technical design pattern which allows networks to exist without relying on a central authority for network management and maintenance. A cryptocurrency is usually (but not always) a required part of a blockchain ecosystem, and is used to incentivize value within the network.

 

Did you know?

While the Bitcoin whitepaper was the first proposal for a blockchain based system, the word blockchain does not appear anywhere in the document!

 

More Information

The Blockchain Institute was founded to help teach people how to build the next wave of decentralized technology. You might find our web3 and downloads section useful, or for more in-depth content please check out our courses portal.

What is Blockchain?

A blockchain is a ledger system which is distributed across a wide network of peers. A ledger in this context is any database system which is write-only, meaning that a record cannot be changed once it has been added to the chain.

Did you know?

While the Bitcoin whitepaper was the first proposal for a blockchain based system, the word blockchain does not appear anywhere in the document!

Fun Fact:

Blockchain networks are kept secure by distributing the responsibility for security across a large network of nodes. As a result, the bigger the network grows, the more secure it becomes!

More Information

The Blockchain Institute was founded to explain blockchain, so naturally we have a lot of content about it. You might find our industry impacts and downloads section useful, or for more in-depth content please check out our courses portal.

What is Decentralized Computing?

Distributed computing has been around for a long time in computer science, but in 2015 the Ethereum foundation changed that. Ethereum’s innovation was to create an economic incentive for nodes to join and help maintain a global, distributed, computer system.

Since 2015, Ethereum has risen to be the second largest cryptocurrency community, and a range of other similar projects have launched to provide more specialized versions of the same concept. Visit our downloads section for a full list of decentralized computing resources!

Also see Decentralized Storage for more interesting ideas about building distributed computing ecosystems.

What is Decentralized Storage?

Since the decentralized computing concept has taken root, it’s been hard to escape the centralization of storage and computing resources. Major providers have come to support the majority of the internet with enormous data centres, and matching their efficiency has been a difficult challenge.

Despite this, there are a wide range of solutions now available that offer decentralized systems developers the ability to provide truly secure, distributed storage withe end to end encryption.

Check out our IPFS Demo here, or our free Decentralized Storage course here!

What is Forking?

What are forks?

A public blockchain can only exist by many node computers running the same software, which collectively maintains the record of the past of the network. If either the collective record or the software that maintains it become contentious, then there can be a fork in the network. There are three main types of forks:

 

Temporary Forks:

The most common way in which a fork occurs is when two separate groups of nodes reach consensus on the history of the blockchain. This can happen during when there’s a high transaction volume, and nodes find multiple new blocks which can be confirmed within the rules of the system. In Proof of Work models, the longest chain will always win, so the network will ultimately return to a global consensus quite quickly.

 

Permanent Forks:

Soft Forks:

If a change is proposed to the network software, then all of the nodes must update their respective copies and begin running the new version. If some nodes do not update their version of the software, they will effectively no longer be participating in the same network as those who did update. In the event that this happens with a large split in the network, then there will now be one network running different versions of the same software. In these cases, miners using the old software will slowly cease to earn rewards as their version of network consensus is slowly obfuscated.

 

Hard Forks:

In some cases, such as the Ethereum DAO hack in 2016, it is not possible for the network to continue with the current blockchain or consensus rules. In the event of such a change, some nodes may prefer not to adopt the new model, and will thereby have an entirely different version of the blockchain and different rules will be used going forwards. Hard forks will always lead to the development of a new chain, and will result in the network being briefly more vulnerable to 51% attacks as there will be less nodes maintaining the security of the network. Ethereum Classic is one such example, it maintains a record of the previous version of the system, along with much lower hashing power than the primary Ethereum chain.