Welcome to the second lesson of the beginner village. Today, let's talk about the cornerstone of cryptocurrency - Blockchain.
In simple terms, blockchain is a public, decentralized, and immutable digital ledger. It consists of a series of 'blocks' linked together, with each block recording transaction information. The cleverness of this design lies in the fact that copies of the ledger are distributed across thousands of computers worldwide, and no single entity can control it, thereby ensuring security and transparency.
But you might ask: If blockchain is so powerful, why does it feel much slower than using a credit card when we transfer cryptocurrency in our daily lives?
This touches on the core design of blockchain. To achieve extreme 'decentralization' and 'security', every transaction must be jointly verified and recorded by a large number of computers (nodes) on the network. This process is called 'consensus', and it ensures that no one can cheat. However, reaching consensus among thousands of nodes worldwide is like holding a global shareholders' meeting, requiring a significant amount of time and computational resources, which naturally sacrifices 'efficiency'.
This is the famous 'Blockchain Trilemma': It is difficult for a blockchain to simultaneously achieve top performance in 'decentralization', 'security', and 'scalability (efficiency)'; it often can only satisfy two out of three. Bitcoin and Ethereum have chosen extreme decentralization and security, thus compromising on efficiency. This also raises a core contradiction that runs through the entire crypto world: In order for crypto payments to be as fast as credit card transactions, must we accept a future that is 'less decentralized'? Is this transaction worth it, in your opinion?
Terminology Explanation:
Blockchain Trilemma: Proposed by Ethereum founder Vitalik Buterin, it refers to the idea that a blockchain project cannot simultaneously achieve 'decentralization', 'security', and 'scalability'; it can at most satisfy two of these three.
