Blockchain is a **decentralized distributed ledger technology**, achieving secure data storage and trustworthy transmission through cryptography, consensus mechanisms, and distributed networks. Its core idea is to build a multi-party participatory, transparent, and immutable data recording system that can achieve trust without relying on centralized institutions. The following details blockchain from multiple dimensions:
One, Basic Concepts
1. Distributed ledger
Blockchain stores data on the computers of multiple nodes (participants), rather than on a single server. Each node keeps a complete copy of the data, ensuring decentralization and resistance to attacks.
2. Blocks and chain structure
- Block: A unit that records transactions or data in chronological order, containing block header (timestamp, hash value, etc.) and transaction information.
- Chain connection: Each new block contains the hash value of the previous block, forming an irreversible chain, tampering with any block will invalidate all subsequent blocks.
3. Decentralization
No central server control, decisions are made collectively by participants through consensus mechanisms, avoiding single points of failure and power concentration.
Two, Core Features
1. Immutability
Once data is on-chain, modifications require the consent of over 51% of nodes (e.g., using PoW consensus), which is nearly impossible to achieve, ensuring the credibility of historical records.
2. Transparency and traceability
All transactions are publicly visible (except for privacy-preserving chains), and data sources and change histories can be traced through hash values. For example, in the food safety sector, agricultural products can be traced from production to sales.
3. High security
Relies on asymmetric encryption (public-private key system) and hash algorithms (e.g., SHA-256) to protect data, attacking a single node does not affect overall security.
4. Smart contracts
Automatically executed program code (e.g., Ethereum's Solidity), triggers operations when conditions are met, applied in scenarios such as automatic claims and decentralized finance (DeFi).
Three, Key Technical Principles
1. Hash algorithms
Transforms data of any length into a fixed-length unique hash value (e.g., Bitcoin uses SHA-256), slight changes lead to huge changes in the hash value, used to detect data tampering.
2. Consensus mechanism
- Proof of Work (PoW): Verifies transactions through computational power competition (e.g., Bitcoin), but with high energy consumption.
- Proof of Stake (PoS): Selects validators based on the amount of tokens held and the duration (e.g., Ethereum 2.0), more energy-efficient.
- Other variants: DPoS (Delegated Proof of Stake), PBFT (Practical Byzantine Fault Tolerance), etc., to adapt to different scenario requirements.
3. Peer-to-peer network (P2P)
Direct communication between nodes, data synchronization without intermediaries, enhancing system robustness.
Four, Application Scenarios
1. Financial sector
- Cross-border payments: Ripple chain achieves near-instantaneous transactions, with costs lower than traditional banks.
- Digital currency: Bitcoin, Central Bank Digital Currency (CBDC).
- DeFi: Decentralized lending, exchanges (e.g., Uniswap).
2. Supply chain management
- Traceability and anti-counterfeiting: Walmart uses IBM blockchain to track food sources, reducing inquiry time from 7 days to 2 seconds.
- Logistics transparency: Maersk's TradeLens platform optimizes global shipping processes.
3. Government affairs and public services
- Identity authentication: Estonia's blockchain digital identity system.
- Electronic voting: Prevents fraud and is auditable, such as the trial project in Zug, Switzerland.
4. Copyright and intellectual property
- Artists secure rights and trade works on the blockchain through NFTs (Non-Fungible Tokens), such as Beeple's NFT artwork sold for $69 million.
5. Healthcare
Patient data is encrypted on-chain, authorized hospital access, avoiding information silos (e.g., MedRec project).
Five, Challenges and Future Development
1. Current challenges
- Scalability: Bitcoin processes about 7 transactions per second, far below Visa's thousands.
- Energy consumption issues: PoW mechanism consumes a huge amount of electricity (Bitcoin's annual consumption exceeds that of Norway).
- Regulatory lag: Anonymity may be used for money laundering, with laws in various countries still exploring.
2. Development trends
- Layer 2 scalability: Such as Bitcoin's Lightning Network, Ethereum's Rollup technology, to enhance transaction speed.
- Cross-chain interoperability: Polkadot, Cosmos enable communication between different blockchains.
- Green blockchain: Shift to low-energy consensus like PoS, Ethereum 2.0 expected to reduce energy consumption by 99%.
- Integration of new technologies: Combined with AI and IoT, such as self-driving cars sharing real-time road conditions through blockchain.
Six, Conclusion
As a 'trust machine', blockchain is reshaping collaboration in various fields such as finance, supply chain, and government. Despite facing technical bottlenecks and regulatory challenges, its potential to enhance transparency and reduce trust costs is immense. In the future, with technological advancements and ecological improvements, blockchain is expected to become one of the infrastructures of the digital economy.