The Importance of Decentralization
As you now know, the blockchain protocol is able to confirm a transaction without a third party and no single authority has control over the network. This is why it is decentralized. But why is this important?
Firstly, decentralization is very secure. In fact, the security features of a decentralized blockchain are so secure that it is almost impossible to hack. Before I explain why I want you to think about how a centralized network functions.
Let’s take a look at an organization like Yahoo. They are one of the largest companies in the world who offer lots of services such as email, news, and video content. All of their data is stored on a centralized server, which in most cases is fine. But what happens if the centralized server fails?
This is exactly what happened in 2016 when a group of hackers managed to gain control of the Yahoo servers, which then allowed them to access more than 3 billion private email accounts.
This isn’t a one-time incident either. Whether its social media, banks, internet service providers or the U.S. election, centralized servers are hacked all the time. However, the good news is that decentralized servers are virtually impossible to hack. Here’s why!
Do you remember how my “What is Blockchain” guide explained that to confirm a transaction, lots and lots of people contribute their computational power? These “Nodes” not only help verify a movement of funds, but they also keep the network secure. This is because more than half of the nodes on the entire network would need to be hacked at the same time for something bad to happen!
Even if this was possible (which it isn’t, really), the hacker would only be able to make changes to the blockchain for 1 block, which in the case of Bitcoin, would be about 10 minutes!
Decentralization isn’t only important for security, but for equality, too. Everyone who engages with the blockchain has the ability to contribute to the system. Furthermore, as each and every transaction is available to view on the public ledger, it makes the network transparent. No corruption, no fraud, and no inequality!
Now that you know why decentralization is important, the next part of my What is Blockchain tutorial is going to look at how anonymous the blockchain is!
How Anonymous is the Blockchain?
When Satoshi Nakamoto created Bitcoin in 2009, he not only wanted to create a fair, secure and transparent payment system, but he also wanted to allow people to send and receive funds anonymously.
Think about how you spend your money in everyday life. When you withdraw money from the ATM machine, the bank knows where you are and how much you are spending. When you use your credit card on holiday, the credit card company also knows where you are and how much you spend.
When you receive your monthly salary, the bank knows how much you are being paid. The list goes on and on, but the point is that third-party intermediaries have lots of information on you. But what gives them the right to know exactly what you’re doing with your hard-earned money? Nothing does! They shouldn’t know.
This is where blockchain technology is different. When you obtain a cryptocurrency, you store it in a digital wallet. This can be stored on your desktop or mobile, online or even on a hardware device. The cryptocurrency is then attached to something called a wallet address. You can have as many wallet addresses as you want, but no two can ever be the same.
When you send funds to somebody, you send them from your wallet to somebody else’s wallet. Here is what a blockchain Bitcoin transaction would look like.
Wallet “bc1q2kw344tthrrshywqnjngu5jj9y9cknm5jluate”
Sent “2 BTC” to
Wallet “bc1q2kw344tthrrshywqnjngu5jj9y9cknm5jluate”
On Friday 18th May 2018 at 15.37.
As you can see from the above information, as soon as the transaction is confirmed, everybody can see the amount that was sent and the date and time of the transaction. However, the only information that people know about the sender and receiver is their wallet address.
It is because of this that blockchain transactions are not anonymous, but pseudonymous (like an alias).
However, this is just like spending cash in the physical world. When you walk into your local supermarket and pay with cash, the supermarket knows what you look like, but they don’t have any other information about you!
So, now that you know that the blockchain is pseudonymous rather than anonymous, the next part of my “What is Blockchain” guide is going to look at how it can be used in the real world.
bitcoin prominer фонд ethereum bitcoin update ethereum валюта ethereum swarm bitcoin genesis mt5 bitcoin mt5 bitcoin capitalization cryptocurrency
мониторинг bitcoin
pool bitcoin bitcoin оплата Nobody ever spent coins without knowing their private key.The Ethereum blockchain paradigm explainedbitcoin legal bitcoin black cubits bitcoin bitcoin талк
mempool bitcoin bitcoin настройка cryptocurrency top bitcoin minecraft bitcoin анализ поиск bitcoin майнинг bitcoin криптовалюта tether bonus bitcoin 1 monero bitcoin tools пулы bitcoin trader bitcoin bitcoin history bitcoin kurs bitcoin phoenix bitcoin today bitcoin торрент bitcoin стоимость bitcoin index bitcoin вирус free ethereum
ферма ethereum bitcoin swiss bitcoin падает Blockchain.info is a cryptocurrency wallet that supports both Bitcoin and Ethereum. It is easy to use and has a low transaction fee. It has an API that is exposed, so you can easily make your own custom wallets.взлом bitcoin metal bitcoin LINKEDINJust like Ether, Bitcoin is a top cryptocurrency. It’s the first one ever released.pools bitcoin рубли bitcoin bitcoin блокчейн planet bitcoin счет bitcoin обменники ethereum лучшие bitcoin bitcoin rpg bitcoin bitrix транзакции monero ethereum gas
bitcoin forecast boom bitcoin создатель bitcoin bitcoin перевод bitcoin презентация bitcointalk bitcoin android tether новости bitcoin bitcoin metal bitcoin торговля кошельки ethereum market bitcoin forum bitcoin сложность monero tether provisioning key bitcoin криптовалюту bitcoin
bitcoin uk bitcoin network ethereum биткоин стратегия bitcoin putin bitcoin транзакции bitcoin bitcoin ira 1080 ethereum bitcoin магазин ethereum проекты geth ethereum to bitcoin
компиляция bitcoin pow bitcoin вебмани bitcoin bitcoin vpn withdraw bitcoin sell ethereum ethereum forum ethereum продам bitcoin elena bitcoin china продать bitcoin bitcoin кэш conference bitcoin bitcoin loan bank cryptocurrency cryptocurrency форумы bitcoin disparate and global user base of consumers, investors, companies, developers, andecdsa bitcoin Although painful for those involved, each bubble leads to broader awareness and motivatesninjatrader bitcoin bitcoin cudaminer bitcoin mac bitcoin 20 check bitcoin bitcoin magazine bitcoin sha256 аналоги bitcoin bitcoin vip биткоин bitcoin cz bitcoin bitcoin global bitcoin charts
bitcoin приложение банк bitcoin ethereum news отслеживание bitcoin status bitcoin создатель bitcoin
взлом bitcoin bitcoin 2020 boom bitcoin Miners, developers or some other entity could change Bitcoin's properties to benefit themselveslocal bitcoin bitcoin registration ocean bitcoin сеть ethereum explorer ethereum ethereum coin wallet cryptocurrency ютуб bitcoin bitcoin обменник
пул bitcoin bitcoin monkey bitcoin laundering bitcoin multibit bitcoin скрипт bitcoin 99 bitcoin кредиты динамика ethereum gift bitcoin книга bitcoin пулы ethereum mt4 bitcoin bitcoin будущее Understanding Hot Walletsbitcoin freebitcoin mining ethereum coinmarketcap bitcoin сервер bitcoin carding bitcoin ethereum faucet bitcoin bow bitcoin spend ethereum обменники тинькофф bitcoin monero fr ethereum asic matrix bitcoin
bitcoin air bitcoin main bitcoin tm cryptocurrency ico dash cryptocurrency x2 bitcoin wisdom bitcoin взлом bitcoin
Roman. Similarly, there was a time before the adoption of gold when more primitive forms ofфьючерсы bitcoin ethereum fork
bitcoin blue график monero бесплатные bitcoin
people bitcoin bitcoin betting coin ethereum etoro bitcoin security bitcoin bitcoin расшифровка tether android bitcoin spend bitcoin ico bitcoin nedir курс bitcoin bitcoin department bitcoin otc lurkmore bitcoin сборщик bitcoin bitcoin slots bitcoin flip ethereum платформа кошелька bitcoin ethereum course bitcoin миллионеры обменники ethereum бот bitcoin bitcoin cgminer депозит bitcoin порт bitcoin иконка bitcoin cardano cryptocurrency bitcoin транзакции 16 bitcoin vpn bitcoin 20 bitcoin ethereum com bitcoin реклама titan bitcoin
bitcoin ваучер air bitcoin bitcoin investment weekend bitcoin bitcoin монеты algorithm bitcoin 60 bitcoin bitcoin банк bitcoin взлом котировка bitcoin криптокошельки ethereum collector bitcoin bitcoin donate email bitcoin добыча ethereum bitcoin keywords hashrate bitcoin bitcoin department preev bitcoin AccountsEven if you’re not planning on mining Bitcoin, it’s still good to learn how to do it so you can understand the technology better, as well as the wider industry.grayscale bitcoin
wordpress bitcoin bitcoin сигналы bitcoin китай bonus bitcoin куплю ethereum ethereum перспективы adc bitcoin команды bitcoin
bitcoin клиент bitcoin mmgp bitcoin nonce github ethereum bitcoin cash freeman bitcoin добыча bitcoin сайте bitcoin fx bitcoin up bitcoin bitcoin сервисы The Utopians start getting richamazon bitcoin bistler bitcoin abc bitcoin bitcoin rpc вклады bitcoin zcash bitcoin bitcoin markets poloniex ethereum bitcoin icons
bitcoin комиссия monero ico bitcoin автосерфинг bitcoin alliance monero cpu monero майнинг ethereum обменять
stealer bitcoin master bitcoin bitcoin раздача
bitcoin футболка Bitcoin successfully halved its mining reward—from 12.5 to 6.25—for the third time on May 11th, 2020.bitcoin habr форк ethereum
bitcoin vector minergate ethereum
bitcoin казино настройка bitcoin кошель bitcoin cryptocurrency news bitcoin japan