In this tutorial, we will discuss the values of blockchain. the best-known implementation of blockchain out there. and a lot of the development and the direction where things are base on the premise of what blockchain does to enable Bitcoin to happen.
Many people call blockchain The Internet of Value or They call it The Internet of Transactions. These are typical things that you will hear.
So, blockchain actually fixes three things that the Internet was not designed to do. And those three things are.
So with blockchain, you can actually create value on a digital asset and control who owns it. if unlike a free item that you can just send to anybody, which loses all value because you have millions of copies. then how can you sell a single one for a certain price, if it’s available free.
The blockchain enables to securely assign ownership of a specific digital asset and be able to track who actually controls that asset at a time.
Blockchain can also be distributed. Because it’s Distributed, that means that you don’t have to have a centralized location for a database. You can actually have it distributed across thousands of different computers worldwide. As a result, You can bring back reliability to the Internet because if you have everything localized in one location it becomes a single point of failure.
But, if you have a value of blockchain that’s actually spread across thousands of different nodes globally, you’d
have to take out the entire network to bring it down. the three items that value of blockchain actually fixes with the Internet are Value, Trust, Reliability.
The Value of Cryptocurrency
As we continue to expand on the value of blockchain, let’s discuss the history of blockchain and how it’s been developing and its usage. bitcoin is the best and most popular version of blockchain.
It’s never been down and never been hacked. and it’s a very secure environment. Now, if your seeing there is a very, very big growth in the adoption of people using Bitcoin.
Now, Bitcoin has a digital asset that you can actually exchange between parties securely over the Internet. That specifically is called Cryptocurrency.
Cryptocurrency is a type of digital asset which can use to exchange value between parties. It uses encryption to secure how it’s transferred and to control the creation of new units of that currency. Cryptocurrencies are actually created by the same mathematical formulas that make the cryptocurrency work. And that’s what bitcoin does.
So, many of these cryptocurrencies take the concept of a bitcoin which is a digital asset that can be used to exchange value securely over the internet.
The Value of Digital Tokens
So, once we’ve established a cryptocurrency using a digital coin and if a digital piece of value. that you’re exchanging such as a bitcoin or another type of coin. the token is a digital asset, that’s a number. basically, you can track where that asset goes,
hence, you can create different types of tokens, and these are called blockchain tokens. so, the blockchain token allows you to assign anything to it.
The Value of Smart Contracts
Smart Contracts allow you to take this same type of functionality of assigning a value. and assigning different conditions to it so that you can actually work the whole exchange of something of value.
For example, whenever you buy a car one of the key things you will do is. you have to find out who owns the car. You then need to come up with some sort of legal agreement that legal agreement will allow you to assign ownership from the owner.
As it currently stands you need a third party such as a broker or needs some sort of bank to be involved in this transaction of value. So, Smart contract does is apply the same concept. that Bitcoin applies to money by Disintermediating the process of any type of contractual obligation.
Actually, once you get the premise that you can build value and tie it onto a value of blockchain and you can transfer value digitally by using a blockchain. you can expand beyond that and give it all the agreements and the different requirements of a contract and have it all automated.