A blockchain, as the name suggests, is a unique type of database. During your searches on social media or somewhere, you might have seen or heard the term distributed ledger technology (or DLT) – in countless cases; these two mean the same thing.
Nevertheless, a Blockchain is a developing list of records, called blocks that get connected with cryptography. Each block contains the previous block's cryptographic hash, timestamp, and transaction data.
We understand the fact that nodes are interconnected and that they store copies of the Blockchain. They communicate information about transactions and connect new blocks. Blockchain nodes enable users to access the data and view all transactions conducted or stored on the network.
We've already covered what nodes and blocks are, but you may be wondering: how are new blocks added to the Blockchain?
HOW ARE BLOCKS ADDED TO THE BLOCKCHAIN?
There is no particular source to communicate to users what needs to get done. Ultimately, there must be a mechanism to determine who and who can add blocks to the Blockchain because all nodes have the same power. In addition, there should be a system that rewards users for being honest and trustworthy but makes it costly to cheat. It is natural for every human to want to do things in a way that would be more favourable to them.
However, for a block to get added to the Blockchain, it must include the solution to a very complex mathematical problem created using a cryptographic hash function that cannot get retrieved. So, the only possible way to answer the mathematical problem is to predict random numbers that will make a well-defined result when connected with the preceding block content. Unfortunately, a typical computer could take about a year to indicate the correct number and solve the mathematical problem.
Nevertheless, because of the large number of computers in the network predicting numbers, a block is solved on average every 10 minutes. In this way, the node that solves the math problem gets the right to put the next block in the chain and distribute it to the network.
MINING (PROOF OF WORK) VS STAKING (PROOF OF STAKING)
It's a widespread belief that Mining is the most commonly-used consensus algorithm. In Mining, a Proof of Work (PoW) algorithm gets used chiefly. Mining includes users forfeiting computing power to solve a puzzle that was put in place by the protocol.
This puzzle, however, requires that users hash transactions and other information involved in the block. Therefore, it must fall below a specific number before the hash can be said to be valid. As there's no way of guessing what a given output will be, miners have to keep hashing slightly revised data until they can find a reasonable solution.
Hashing data frequently is computationally costly. In Proof of Work blockchains, the "stake" users incur is money invested in mining computers and the electricity used to power them. They support this money with the belief that they will get Block rewards.
Talking about POW systems, what stirs users to act honestly is their payment for mining computers and electricity. Hence, if users don't mine blocks correctly, they won't return their investment.
However, with Proof of Stake (PoS), there are no external expenses. Instead of miners, some validators recommend (or "copy") blocks. So, to generate new blocks, they use a regular computer and are expected to invest a considerable percentage of their funds at stake for such an opportunity.
Staking can be done with a considerable amount of the Blockchains' intrinsic cryptocurrency, based on the rules of every single protocol.
Different operations have different variations, but as soon as a validator stakes their units, they can be picked casually by the protocol to reveal the next block. So, if they can do so appropriately, they’ll receive a reward.
BLOCKCHAIN SCALABILITY
Talking about Blockchain being scalable, the system has accomplished an advanced TPS (Transaction per second) than the other available systems. It is done by reforming its consensus mechanism and amending some system parameter(s).
For years, Scalability has been known to be a highly discussed subject amongst blockchain inventors. As a result, several solutions have gotten planned or implemented to overcome some of the performance shortcomings of Blockchains. However, at this juncture, there is no clear best approach. Therefore, there may be different solutions that need to get tested until they can get a more straightforward answer to the scalability problem.
On a comprehensive level, two fundamental questions get asked on Scalability, they are:
Can the implementation of the Blockchain itself be optimized (on-chain scaling)? Or,
Can transactions be implemented without expanding the main Blockchain (off-chain scaling)?
Please note that these two types have their rewards. For example, on-chain scaling solutions may decrease the size of transactions or adjust how data gets stored in blocks. In comparison, Off-chain may involve batching transactions off of the effective Blockchain, thereby leaving them to be added to the Blockchain later. Some of the noteworthy off-chain solutions are popularly known to be Sidechains and payment channels.
Now, the question is: why does Blockchain need to scale?
Blockchain systems are to compete with their centralized counterparts, and to do that; they would need to be as active as them. Convincingly, it's likely they have to perform even better to stir up developers to change over to blockchain-based platforms and applications.
It indicates that when likened to centralized systems, blockchains may need to be quicker, low-cost, and stress-free for developers.
WHAT IS A BLOCKCHAIN FORK?
Never forget that Blockchains get distributed networks. Blockchain forks are a division in the blockchain network. A network is open-source software, and the code is easily accessible. It indicates that any user can recommend upgrades and also change the code. The decision to research open-source software is an ultimate part of cryptocurrencies that supports software updates to the Blockchain.
Blockchain forks work by offering upgrades to the software protocols of the Blockchain. Most times, they get connected with the creation of new versions. Thus, creating new cryptocurrencies is by making them from scratch or "fork" the available crypto coins blockchain.
SOFT FORK VS HARD FORKS
A hard fork is a radical software change that requires all users to update to the latest version. As a result, the nodes running on the preceding version of the software will no longer get recognized on the new version. A hard fork is a stable variance from the old version of the Blockchain. If there is no form of agreed consent for the latest version, it could lead to the two Blockchains using a variant of the same software.
On the other hand, a soft fork is backwards-compatible. The upgraded Blockchain is the one responsible for authenticating transactions. But, any nodes not updated will still see the new blocks as being established.
It can only work in one way, and that is the fact that the upgraded Blockchain will not accept the nodes that did not get updated. So for the soft fork to work, most miners need to correct it. The more miners agree to take the new rules; the more protected the network will be for soft-fork.
BOTTOM LINE
Now, the question is: can Blockchain work without cryptocurrency?
Well, Blockchain gets connected with cryptocurrencies from the onset. It is the reason most people might think that Blockchain can't work without cryptocurrency. But Blockchain can work without cryptocurrency.
Several platforms don’t have any native tokens or coins. As a result, most blockchain projects now are moving towards the token or crypto-less ecosystem.
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