The Blockchain

The blockchain is something which is really interesting to me and I have talked about it many times in the past. However, many people still do not know what a blockchain is and how it works. I personally think that this technology has the potential to grow into something big, despite it currently being a cumbersome, impractical and misused thing.

A blockchain itself is a public decentralised and digitised ledger, or database. It consists of a chain of data, separated into "blocks". Information is gathered into a block and once the block is filled with data, it is "closed" and then appended to the end of the blockchain.

When people hear "blockchain", their immediate thought goes to Bitcoin, the largest and most recognised cryptocurrency. There is a huge number of cryptocurrencies in existence as I am writing this article and they all work on a blockchain system. However, blockchain and cryptocurrency are not the same and are not interchangeable terms. Cryptocurrency is an application of the blockchain, a system designed to work on blockchains.

In the case of cryptocurrency, it is the transaction data which is being stored in the blocks of the chain. The Bitcoin cryptocurrency only exists on top of the Bitcoin blockchain, which acts as a secure ledger for BTC transactions.

"Bitcoin mining" - something which a lot of people have heard but very few understand what it means. Earlier, we saw how Bitcoin is decentralised. In fact, the blockchain is supported by "miners" who are those people adding the newly completed blocks to the end of the chain.

Bitcoin mining in itself involves the use of high amounts of processing power to "validate" the new block. This is because of the secure nature of the cryptocurrency. Everything needs to add up so there is no disappearing cryptocurrency or someone creating more out of thin air. This prevents any fraudulent or malicious activity on the blockchain. Since the blockchain gradually grows in length, it becomes harder and harder to perform the calculations needed to validate the chain and thus the computing power requirements gradually grow.

The interesting thing about mining is that, by validating one block of the blockchain, the miner(s) are rewarded with a cryptocurrency reward which is deposited to their wallet.

Due to the difficulty in validating one block of the Bitcoin blockchain, it is increasingly common for people to put their computing resources together in a "mining pool" and they share the rewards in terms of how much contribution they make to validating the block.
Going further into detail, the blockchain miners need to be extremely quick, since with current proof of work blockchains, it is only the single validator (either a person or a mining pool) which reaps the reward. This means miners are competing against each other in a race to be the fastest.

Miners either use graphics cards or dedicated ASIC miners to perform the calculations needed to validate the blockchain. ASICs are dedicated number-crunching circuits which are able to process data extremely fast and are thus highly specialised towards mining. Graphics cards are also used due to being cheaper than ASIC miners but are not dedicated to mining. After all, they're more often used for gaming and graphics processing. A huge difference between these two mining options is that ASICs tend to be more durable while overworked graphics cards may fry their memory chips from staying fully loaded 24 hours a day for weeks on end.

As I said above, the principal use of Blockchain technology is principally for cryptocurrencies, such as Bitcoin, Ethereum, Solana (my personal favourite) or Dogecoin. However, real world application of blockchains has branched off, touching many more domains.

The Metaverse

The Metaverse is a term which has been tossed around a lot recently. After all, it's all the metaverse hype which led Facebook to rename itself as Meta.

A metaverse, in its most rudimentary form, is a virtual world where people can do things together. This means that games such as Minecraft or VRChat are technically considered metaverses. Although, to be fair, in this context, a metaverse is usually linked to a blockchain which provides a system of "ownership" over items in the game, such as land or cosmetics.

An example would be Sandbox, which has made a game with ownership over land, on which you can build anything. Additionally, a small community of No Man's Sky players created a worthless cryptocurrency finance ecosystem, effectively metaverse-ifying the game.

Blockchain Ownership / NFTs

This is somewhat a more fundamental view of the previous part.

An interesting thing about the blockchain is that it is possible to stuff any kind of data into the blocks. As such, it is seeing increasing use in a "proof of ownership" system, primarily in the form of NFTs.

NFT stands for Non Fungible Token - it is something existing on the blockchain which cannot be replicated. Consider an image being published as an NFT. The image itself is hosted on a number of NFT sites, such as opensea.io. A link to the NFT image is then added to the latest available block on the chain. This means that the image is now tied to a particular block on the chain, giving it a unique ID which will never be replicated ever again in that chain.

Cloud Storage

Certain blockchains are branching into cloud storage in a decentralised manner. Current cloud storage, such as Google Drive, is centralised; it is managed by a central organisation. However, certain blockchain applications want to revise this approach. Here, instead of mining involving calculation of numbers, it is the storage of data on a local drive. The person storing this data is then rewarded with cryptocurrency. Such an apporach would allow several copies of certain data (data redundancy) across the world, allowing a worldwide cloud storage option.

Voting System

A recently proposed system aims to tackle voter fraud or tampering of results. It would involve each person being issued an NFT. Each NFT is unique but, since blockchains are pseudo-anonymous at worst, voter anonymity is still retained. To vote, each person will send this token to the address corresponding to the politician they are voting for. The politician with the most tokens attributed to their account is therefore the one with the most votes.
And since a blockchain cannot be tampered with, it guarantees integrity of voting.