The implementation of DLT (distributed ledger technology) led to its first and obvious application: cryptocurrencies. This allows financial transactions based on blockchain technology. It is used in currency and payments. Bitcoin is the most prominent example in this segment. Blockchain 2.0:
The new key concepts are Smart Contracts, small computer programs that "live" in the blockchain. They are free computer programs that execute automatically, and check conditions defined earlier like facilitation, verification or enforcement. It is used as a replacement for traditional contracts. Blockchain 3.0:
DApps is an abbreviation of decentralized applications. They have their backend codes running on decentralized peer-to-peer networks. A DApp can have frontend code and user interfaces written in any language that can make a call to its backend, like traditional Apps.
Blockchain Variants
Public: In this type of blockchains, ledgers are visible to everyone on the internet. It allows anyone to verify and add a block of transactions to the blockchain. Public networks have incentives for people to join and are free for use. Anyone can use a public blockchain network. Private: The private blockchain is within a single organization. It allows only specific people in the organization to verify and add transaction blocks. However, everyone on the internet is generally allowed to view. Consortium: In this blockchain variant, only a group of organizations can verify and add transactions. Here, the ledger can be open or restricted to select groups. Consortium blockchain is used in a cross-organizational way. It is only controlled by pre-authorized nodes. Next week, we will be examining blockchain use cases. Stay tuned!
