You may have come across the term “blockchain” on social media or online news covering cryptocurrency or during a conversation on the future of technology. In a nutshell, blockchain serves as a shared, unchangeable, digital record of pieces of information (such as transactions) stored in computers or servers.
Benefits of blockchain
Both blockchain and cryptocurrencies are frequently associated with each other by definition, because cryptocurrencies rely on blockchain technology to exist. They aren't the same, but the blockchain technology that underpins crypto does offer many benefits, including the following:
Public
A public blockchain is permissionless, meaning it is fully decentralized and anyone can participate in it. This allows users with an internet connection to access, download and join the blockchain as an authorized node. All the nodes within the blockchain have equal rights to access and interact with the network. This kind of blockchain is often used for exchanging and mining cryptocurrency. The most widespread consensus mechanisms used in public blockchains are proof-of-work and proof-of-stake.
Pros of a public blockchain:
Benefits of blockchain
Both blockchain and cryptocurrencies are frequently associated with each other by definition, because cryptocurrencies rely on blockchain technology to exist. They aren't the same, but the blockchain technology that underpins crypto does offer many benefits, including the following:
- Security
- Transparency
- Automation
- Efficiency
- Cost reduction
Public
A public blockchain is permissionless, meaning it is fully decentralized and anyone can participate in it. This allows users with an internet connection to access, download and join the blockchain as an authorized node. All the nodes within the blockchain have equal rights to access and interact with the network. This kind of blockchain is often used for exchanging and mining cryptocurrency. The most widespread consensus mechanisms used in public blockchains are proof-of-work and proof-of-stake.
Pros of a public blockchain:
- Open to the public – Anyone can access the network.
- Pseudonymous - You are not required to reveal your identity to be able to participate.
- Decentralized – No central authority maintains the network.
- Transparent – Anyone can have full access to the ledger at any given time, eliminating the chance of corruption or discrepancies within the network.
- Immutability – Once blocks are created and inserted, it is practically impossible for anyone to change and manipulate the blockchain.
- Rewards - As a miner or validator, you can earn rewards by discovering new blocks or for validating transactions on the blockchain network, depending on the consensus mechanism.
