Blockchain is a chain of blocks containing information, designed to timestamp digital documents securely and prevent tampering without a central server. It underpins cryptocurrencies like Bitcoin but has applications far beyond digital money.
Key Points:
What Blockchain is NOT: Blockchain ≠ Bitcoin. Blockchain is the technology; Bitcoin is a token.
Architecture: Each block contains data, its own hash, and the previous block’s hash, forming a secure chain.
Proof of Work: Computational effort ensures new blocks are hard to tamper with.
Distributed P2P Network: Nodes hold full copies of the blockchain and validate transactions collectively.
Versions:
1.0: Currency (Bitcoin)
2.0: Smart Contracts
3.0: DApps (Decentralized Applications)
Variants: Public, Private, Consortium
Use Cases: Finance, healthcare, supply chain, IoT, smart cities, humanitarian aid.
Advantages: Resilience, security, transparency, decentralization, fraud prevention, time efficiency.
Limitations: High cost, slower transactions, smaller ledgers, risk of human error.
Real-Life Examples:
Dubai Smart City: Blockchain-enabled investor and industry connections.
Incent Customer Retention: Loyalty token system on blockchain.
Humanitarian Aid in Pakistan: Transparent distribution of funds and goods via blockchain.
Blockchain & Bitcoin: Blockchain tracks ownership of digital tokens; Bitcoin relies on it, but blockchains exist beyond Bitcoin.
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