What is Blockchain Technology (What is Blockchain Technology)?

What is Blockchain Technology? What is it exactly? Blockchain, also known as distributed database, is a way of encrypting, recording, and verifying transactions. In traditional computer networks, data is stored in one place, and no one can change or modify this information, which means we can use the same data for transactions without changing the system. Therefore, when we calculate something, what we need to remember is the name of the item and the location of its ownership.

If a machine wants to transform itself into an airplane or a bridge, it can transfer its value to others in different ways. This leads to two results: 1. You can control whether your computer owns the vehicle; 2. Once you know what has happened to the car (e.g., if you have a mobile phone), you can’t let others access the car, but can only perform such operations through your own device. This is a trust mechanism where people can track and reach consensus on their own terms, making it more efficient and reliable while ensuring that no one steals their assets. However, since most people have experienced the Internet in real life and are living in the mobile era, we need to address this issue, which is why we need to use blockchain technology to establish our business models and economies.

What is Blockchain Technology Exactly

What is blockchain technology exactly? What are its similarities with other technologies?

First of all, from the definition, we know that blockchain is a distributed database. Its purpose is to ensure the safe operation of the system and the integrity of transaction data by recording the account books of all nodes on the chain and storing them in an immutable and transparent manner. Furthermore, since blockchain is a decentralized network, no one can control it and anyone can view or participate in it.

Blockchain technology, also known as “consensus mechanism”, refers to a digital ledger technology supported by a specific cryptocurrency (e.g., Bitcoin), which allows a single address to perform multiple operations. Therefore, each block contains different hash values, but the security of the entire network cannot be guaranteed. If a block is not confirmed, the transaction will fail or be completely invalid; otherwise, the transaction will be delayed or terminated. This method requires a certain transaction fee and verification cost for each blockchain transfer. In addition, blockchain can be used to trace the flow of funds in cases of fraud.

However, blockchain is not that simple because it does not rely on existing trust systems but is maintained using cryptographic principles, which is one of the technical characteristics of blockchain:

1. There is no central authority to review the data.

2. Blockchain will not become a tool for illegal activities.

3. Only a few users possess their private keys and have enough time to make it difficult to identify their identities.

4. Blockchain only provides services for certain things, rather than serving as financial assets.

However, although some projects are trying to address the above issues and have made corresponding development work, they still face many challenges in practical application scenarios – such as regulatory issues. For example, some government departments in China are also trying to establish a system specifically designed to combat cryptocurrency fraud, and multiple departments including the National Internet Information Office are working hard to deal with such threats. (Note: The author of this article is Wu Zhiguang, Vice President of Tencent Cloud).

In addition, it also involves another key term in the field of blockchain: Non-Fungible Tokens (NFT). Simply put, NFT is a relatively new application form, and its value lies in its unique attributes, such as scarcity and utility. It refers to a unique token representing ownership of an item (ERC-20). It is not limited to art collections, game props, etc., but has many other uses.

Currently, the main advantage of blockchain technology is its high credibility: you don’t have to worry about hacker attacks even in extreme situations, and it provides better protection of privacy and anti-theft than traditional hardware wallets. Of course, as more and more companies start to enter this field.