Blockchains, one of the most referenced buzz words of 2018-2019, what is it and how does it work? At a high level, a blockchain is a distributed database, or ledger that is hosted by nodes (or peers) on the network who provided CPU/GPU/RAM/etc... depending on what the blockchains mining algorithm specifies. The job of a node, witness, or miner is to verify the legitimacy of transactions, by confirming and filtering any malicious activity, and those transactions are eventually aggregated into a block, once consensus is reached, and appended to the chain. This work is all done under the hood with the encrypted merkle trees.

Why Use a Blockchain

Blockchains at it's very core and Bitcoin, specifically, was constructed out of the vision to bank the millions of unbanked world wide, and create a "trust-less" transaction system. This was achieved by eliminating the middleman, or third-party (bank), and instead implement a peer-2-peer network where each node holds a full copy of the ledger (non-technically, a spreadsheet).

This modification would lower the costs of centralized servers, and as a result, allow somebody in Africa to send money to somebody in the United States at a very negligible rate, compared to what centralized entities charge. Additionally, the change of network protocols and introduction of mining would create a more robust system because a single-point-of-failure falls out of the picture. Additionally, the data stored on the ledger becomes immutable and not subject to manipulation or server failure.

Use-cases for Blockchains

If your reading this blog, you already see one use-case for blockchain technology. The STEEM blockchains solves the problem of data censorship and demonetization as seen on most mainstream social media networks, it also gives you 100% full rights of your content, and it provides a way for a large market of content creators to monetize their data and not have their data pawned and monetized without their consent.

On the technical spectrum, the STEEM blockchain solves the issue we saw with the rise of the Bitcoin network back in 2017-2018 when the chain gained popularity it slowed down in processing time, and a user making a transaction would incur an enormous fee. Not on STEEM, with 3 second block times, nearly, if not to the same speed of credit card processing times, and unprecedentedly, completely fee-less transactions. (Kudos to the genius behind Delegated Proof of Stake blockchains, @dan.).

STEEM is not the only blockchain who solves an issue related to centralized architecture. There are hundreds, if not thousands of other blockchains that solve a large array of problems. On the other side of the coin, there are hundreds of blockchains/cryptocurrencies that do not solve a problem and are out just to make a penny on the uninformed user. So, one plans on staying the the blockchain space, one must educate themselves.

What is a Cryptocurrency?

A cryptocurrency is a currency maintained by the nodes on the blockchain and used by the wallets/accounts registered on the blockchain. The question I get asked the most is why would I use a cryptocurrency over government-backed money and how is it valuable if it's not backed by anything. Firstly, let me address the similarities, both fiat and cryptocurrencies are used as a medium of exchange, their values are determined by supply/demand/utility/scarcity economics, and both are interpreted valuable by the trust and faith of the society. And, of course, neither have any intrinsic value with an exception for cryptocurrencies pegged to a metal or such.

Cryptocurrencies and fiat are different in the following ways, fiat is distributed, ran, and controlled by the central banking system/government. At any given point in time, the government can print money out of thin air as such happened in Venezuela and chaos erupted. Meanwhile cryptocurrencies are distributed in a decentralized manner following a hard set of rules initiated and updated by the community so printing cryptocurrencies outside of the specified ruleset becomes impossible.

Fiat comes both in the physical form and digital form while cryptocurrencies are strictly digital but also transparent by nature. With cryptocurrencies, you are in full control of your own money which comes with more responsibility but also takes the burden off your shoulder that comes with fiat money because at any time, your bank account could be frozen by the government and you lose all access to your money.

To wrap it up, it comes down to your personal conscience and weather you trust the government over yourself with your loot. The value of a currency, fiat or crypto, is determined by the minds of the men using it, and the market economics associated with it. Generally, cryptocurrency is much more volatile than fiat, so use at your own discretion. I, personally, will choose to user cryptocurrencies over fiat every time I can to support the growth of the community.

Decentralized Applications (dAPP)

dAPP's are one of the most promising side effects of blockchains. As specified by another genius, Vitalik Buterin, in the Ethereum whitepaper, dAPP's are split into three main categories:

Financial Applications. Provide users with methods to manage finances, both fiat, and crypto-based, including savings, wills, and “even some classes of full-scale employment contracts.”

Semi-Financial Applications. Involve money, but finance is not the main focus; the given example is for “self-enforcing bounties for solutions to computational programs.”

Non-Financial Applications. Do not involve money at all, such as an identity verification process, voting system, governance tool, or even decentralized file storage system.

dAPP's leverage a tool called smart contracts, which in this context, a smart contract is used as an API to fetch data and execute tasks which connects to the blockchain, or creating a token/cryptocurrency. Smart contracts can do a host of other things but the main principle is they are condition-based and computer programs that execute as per the condition. I read somewhere that a dAPP can be thought of as a blockchain enabled website (if it's not a downloadable client) and I would have to second that thought. An instance of a dAPP is Steemit, which has open-source code, and provides an interface for the user to interact with the blockchain.

Prompt: Write an intro blog on a new technology that we haven't hit yet (or won't).

I am currently in my final month of an immersive full stack web development bootcamp at Suncoast Developers Guild in St. Petersburg, Florida.