Cryptopia

<h2 id="header-0">What is Blockchain Tech?</h2><p>One of blockchain technology’s most successful prototypes, Bitcoin, was described by its author Satoshi Nakamoto as ‘a purely peer-to-peer version of electronic cash without going through a “trusted” financial institution’. After its development in 2008, its function had an impact reaching farther than being initially intended as “electronic cash&#34;.</p><p>The blockchain uses a distributed ledger where node validators apply a cryptographic equation (hence cryptocurrency) to simultaneously verify and publish all the transactions made within a given time period into ‘blocks’ of transactions. Besides block validation, cryptography methods are also used to generate user-assigned wallet addresses and digital signatures.</p><h3 id="how-it-works-in-a-nutshell">How it Works (In a Nutshell)</h3><p>Each block consists of transaction data where all current and previous transactions (input) are permanently recorded in the form of a “hash” (output), and since all incoming and outgoing transfers are included — so is your wallet addresses’ net balance.</p><p>The hash is an encrypted result of arbitrary calculations, called algorithms, so that it is nearly impossible to reverse-engineer what the input was originally. This helps maintain anonymity which makes crypto highly sought after.</p><p>Since Bitcoin’s genesis block in 2009, all previous blocks are then embedded in the current block’s hash or output. The current block is then included in the next, and all succeeding blocks, into a “chain” of transactions, hence it is called blockchain. This design feature called immutability makes transactions irreversible.</p><h3 id="node-validators">Node Validators</h3><p>Node validators around the world, known as miners, independently work to confirm the correctness of each block for a reward, or reject transactions that are invalid based on the blockchain’s protocol. Once the majority of nodes in a mesh network agree to its validity then a block of transactions is published on the blockchain.</p><p>Since current transactions are also validated in relation to all previous blocks, it is impossible to reverse or delete transactions since the past blocks have elapsed, and work can only be done on the current block. This framework is a common way of blockchain validation called proof-of-work, used by Bitcoin, Litecoin and Ethereum (prior to ETH 2.0) to name a few.</p><h3 id="why-use-blockchain-tech">Why use Blockchain Tech?</h3><p>In theory, the only way to ‘hack’ the blockchain is for attacking nodes to outnumber honest nodes by 51% versus 49%. This sounds alarming but by design this still makes blockchain more secure than the everyday centralized servers of financial institutions we use, which have multiple points of weakness that will be discussed later in this article.</p><p>Another key feature of blockchain design thanks to its independent nodes, is decentralization. Each node on a distributed network holds a complete copy of every transaction down to the genesis block. If 99% of all validators went offline — it would have massive effects on transaction speeds and other performance factors — but every single transaction would remain on record. This is why proponents of the blockchain claim it to be indestructible. In fact, they also claim that as long as the internet exists, the blockchain will too.</p><p>Another benefit that comes along with the indestructible quality of having decentralized nodes, is security. A 51% attack would be a nightmare for those attempting to take over via hacking 10s of thousands of individual miners, at the same time.</p><h3 id="why-are-hacks-prevalent-in-cryptocurrency">Why are Hacks Prevalent in Cryptocurrency?</h3><p>The common misconception is that the blockchain has been hacked, multiple times. Executing a 51% attack on large blockchain projects like Bitcoin or Ethereum is nearly impossible, while a 51% attack on smaller no-name crypto projects might be.</p><p>Nonetheless, there are many people who have inadvertently lost funds in crypto. They do this through other means like login phishing and wallet hacking, bridge exploits, and fraud in centralized exchanges (CEX), but none of these have been a true breach in blockchain’s design itself.</p><p>Bridge exploits are hacks that occur using on- and off-ramps between two DeFi projects whether exchanging one crypto for another, or crypto for fiat currencies. This is the main cause of billions lost through cross-chain vulnerabilities and many more billions to fraudulent actors in centralized exchanges.</p><p>Cryptocurrency wallet users act as their own bank and are responsible for making all the input accurate. Entering wrong details like transfer amounts, wallet addresses, chain networks and others can result in funds being lost forever. The same thing goes about your wallet and device security. Users are responsible for safekeeping recovery phrases or login credentials, and making sure to only use trusted devices.</p><h3 id="how-traditional-finance-fails">How Traditional Finance Fails</h3><p>Banks have been around in some form since the middle ages, although banks today share little by way of operations to these early versions. One thing they do have in common is the basis of “trusting” bankers with customers’ assets, and mediating transaction disputes between payers and payees.</p><h3 id="why-is-trust-a-bad-thing">Why is Trust a Bad Thing?</h3><p>Without even taking into account the significant cost of using centralized financial transactions, ‘proof’ is the alternative that blockchain provides in place of ‘trust’.</p><p>Proof is superior to trust, which is why blockchain’s framework hinges on the proof-of-work/stake principle.</p><h3 id="what-s-wrong-with-current-financial-systems">What’s Wrong with Current Financial Systems?</h3><p>(1) Customers can bypass merchant refunds by disputing bank charges, (2) merchants can continue charging customers for subscriptions they refuse to cancel based on their ToS (Terms of Service). And (3) it falls on the bank — whom they both trust — to come up with a fair resolution.</p><p>(1 and 2 happen more often than 3)</p><p>Banks also use a centralized server where all customer financial data is located in one place. Besides the systemic risk of the trust model, a centralized data server means there’s a common point of failure. What’s more, supporting functions like two-factor authentication (2FA) and automated clearing house services (ACH) are outsourced, so in a way banks get the worst of both worlds in centralized and decentralized finance.</p><p>Having a “trusted” third party between payer and payee also adds cost, discouraging small and casual transactions, while bigger impractical fees are charged for larger sums.</p><h3 id="will-blockchain-tech-phase-out-traditional-finance">Will Blockchain Tech Phase-out Traditional Finance?</h3><p>This is the ultimate question on peoples’ minds when they think of blockchain tech. The answers range from “it’s only a matter of time” to ”not in a million years”.</p><p>There are many valid points to be made for either side of the argument. Estimates show that anywhere from 420 million up to 1 billion people currently use some form of blockchain tech and it is no surprise why central banks are fighting back. There are 35 countries in Asia alone that have announced plans for their own central bank digital currency (CBDC), with dozens more elsewhere also in development. The only fair answer is, let’s<em> wait and see.</em></p><p>—————————————————————————————————————</p><p><strong><u>What is Cryptopia?<br /></u></strong>Cryptopia is an upcoming blockchain game that stands out by design:<br />• Free to earn: everyone can play and earn. No need to buy an NFT first<br />• 100% decentralized: the game runs on the blockchain in combination with a node network<br />• Fun to play: play the way you want!</p><p><strong><u>Official Links<br /></u></strong>[Website] <a href="https://cryptopia.com/?ref&#61;CMC" rel="noopener noreferrer nofollow">https://cryptopia.com</a><br />[Wiki] <a href="https://wiki.cryptopia.com/" rel="noopener noreferrer nofollow">https://wiki.cryptopia.com</a><br />[Discord] <a href="https://discord.com/invite/cryptopia" rel="noopener noreferrer nofollow">https://discord.com/invite/cryptopia</a><br />[Facebook] <a href="https://www.facebook.com/CryptopiaOFCL" rel="noopener noreferrer nofollow">https://www.facebook.com/CryptopiaOFCL</a><br />[Twitter] <a href="https://twitter.com/CryptopiaOFCL" rel="noopener noreferrer nofollow">https://twitter.com/CryptopiaOFCL</a><br />[YouTube] <a href="https://www.youtube.com/&#64;CryptopiaOFCL" rel="noopener noreferrer nofollow">https://www.youtube.com/&#64;CryptopiaOFCL</a><br />[Instagram] <a href="https://www.instagram.com/cryptopiaofcl" rel="noopener noreferrer nofollow">https://www.instagram.com/cryptopiaofcl</a><br />[CoinMarketCap] <a href="https://coinmarketcap.com/community/profile/Cryptopia" rel="noopener noreferrer nofollow">https://coinmarketcap.com/community/profile/Cryptopia</a><br />[Twitch] <a href="https://www.twitch.tv/cryptopiaofcl" rel="noopener noreferrer nofollow">https://www.twitch.tv/cryptopiaofcl</a><br />[Spotify] <a href="https://open.spotify.com/show/4jkkGIZyiSkQvYLWqGLWVE" rel="noopener noreferrer nofollow">https://open.spotify.com/show/4jkkGIZyiSkQvYLWqGLWVE</a></p><p><strong><u>For Investors<br /></u></strong>[Private sale] <a href="https://app.cryptopia.com/privatesale-entry?ref&#61;CMC" rel="noopener noreferrer nofollow">https://cryptopia.com/privatesale</a><br />[Early-access NFTs] <a href="https://app.cryptopia.com/early-access?ref&#61;CMC" rel="noopener noreferrer nofollow">https://app.cryptopia.com/early-access</a><br />[Cryptopia Roadmap] <a href="https://sharing.clickup.com/24415847/b/q93k7-827/board" rel="noopener noreferrer nofollow">https://sharing.clickup.com/24415847/b/q93k7-827/board</a><br /></p>

How Does Blockchain Tech Work?

Table of Contents

Cryptopia

Other articles published on Feb 1, 2023

DollarMoon - A Project Introducing a Value-Leading System in the Crypto World

Bitcoin’s Long-Term Opportunity is Strengthening, Says Ark

Crypto News of the Day: Ethereum to launch new Zhejiang testnet, Hong Kong to require stablecoin ...

BNB Chain Spotlight: Zebec

Metaverse Jobs Review, Part 1

1inch Monthly Digest: January

Join our free newsletter for daily crypto updates!