More Than Just Bitcoin: 5 Questions About Blockchain Technology
By Marko Vidrih on ALTCOIN MAGAZINE
Has the blockchain bubble burst? Is it too early to deal with your own projects? How do Smart Contracts work? How does an app become a dApp? Which use cases are suitable for which types of chains? The most important thing about the technology behind Bitcoin: five questions, five answers.
The fact that behind Bitcoin is a sometimes mysterious technology called Blockchain, should now be penetrated to some. But what is behind the technology that Satoshi Nakamoto’s Bitcoin has made possible? What do you have to know? Five questions about the blockchain.
Has the blockchain bubble already burst?
Counter question: Which blockchain bubble? Right, Bitcoin crashed in 2018 and with it the perfidious promise that anyone can easily become a millionaire within months. But this has about as much to do with the Blockchain as Angry Birds with ornithology. Let’s take a look at the Hype Cycle of Gartner, we can say: The Blockchain behaves almost prototypical and we are now plummeting from the “peak of exaggerated expectations” in the “Valley of disappointments”. The legitimate hope: With the bursting of the crypto-bubble, the chaff separates from the wheat and we finally talk not about HODL and FOMO, but about what the Blockchain can actually do.
Is it too early to deal with your own Blockchain applications?
We are still in the very early days of blockchain technology. It is still very early for most applications because today’s blockchain applications need to become more scalable and reliable. The development of the underlying technology is very broad today. It is almost impossible to guess which technical solution will prevail in five years. And yet it is at this time especially important to penetrate the technology in practice. This way, one can understand and help shape the development of new business models and organizational structures and not react to them when dictated by competition.
How do Smart Contracts work?
Smart contracts are programs that are stored on the blockchain. Like every transaction, they get a unique address under which to interact with the smart contract. Depending on the programmed logic, the Smart Contract performs actions such as: For example, save values, save tokens, or grant rights. Simplified, you can think of it as macros in an Excel spreadsheet that work on simple if-then rules.
What makes an app a dApp?
An app becomes a dApp if its business logic is stored remotely on a blockchain and the code is open-source. Unlike an app, there are no central servers or companies that affect the function of the dApp. This is done by replacing the classic backend server with smart contracts.
Which use cases are better suited for public chains, and which for private chains?
Public chains are useful for use cases that already contain public data. For example, for land register entries that are typically available in public records. Private chains are useful for use cases in companies that deal with sensitive data. This may include digital assets that are typically anonymous, such as stocks or information in supply chains. In addition, there will be combined use cases in the future. Enterprise Ethereum is a private chain with the architecture of a public chain, making it particularly suitable for transferring entries between the two blockchain types.
Author: Marko Vidrih
Featured image via Shutterstock
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The purpose of ALTCOIN MAGAZINE is to educate the world on crypto and to bring it to the hands and the minds of the masses. This article was written and composed by Mohammad Musharraf on ALTCOIN MAGAZINE.
