Updated: Apr 12, 2021
What do you know about Blockchain?
Consumers and customers need more transparency, more traceability and a new way to compromise in the supply chain for example. Faced with this new demand and not resolved by the existing solution, blockchain a new software, the lines of code (solidity for example) meet the demand. It can be imagined by the association of two concepts of cryptography and human logic. An open distributed ledger that can record transactions between parties in an efficient and verifiable and permanent manner. Instructions are given through the smart contract by validating the token transaction. Today, the blockchain is at the end of the pioneering phase and many opportunities present themselves. And there are many types of blockchain, private, public, and hybrid. Some key parameters like transaction throughput in second time, confirmation time and mechanism if it is consensus, proof of work, proof of stake can compare efficiency between blockchains like Bitcoin, Ethereum, Ripple, vs Visa. Some countries are ahead and are implementing it in life like Australia, China, Malta. The Hyperledger project has a position differentiated by the modularity aspect. You can plug in any innovative functionality and modules.
What are Smart Contracts?
In order to reduce the cost of intermediaries (transaction cost theory) and to reduce information asymmetry (agency theory) in the value chain, new technologies have emerged such as the smart contract, whether anonymously or not. The smart contract is a digital agreement (lines of code) that has been made tamper-proof by being executed on a decentralized node network, e.g. Ethereum for example creating a more reliable and therefore superior digital deal. It offers security, reliability, fairness, efficiency. Ricardian contracts are readable and recognized by the authorities, not the classic smart contract.
Explanation of Hard fork and Soft Fork?
Systemic stimuli (cyberattack) have an impact in the blockchain like the change of cryptography or the consensus mechanism. This can result in a soft forks' protocol which temporarily modifies the rules of the blockchain and remains interoperable with the previous block while the hard fork introduces a permanent change and therefore creates a divergence which means a new branch not interoperable with the block previous.
State the difference between proof-of-work & proof-of-stake?
Proof of work requires all of its miners to attempt to solve a complex sum, with the winner determined by the person who has the most powerful/ quantity of hardware devices. Proof of stake model randomly chooses the winner based on the amount they have staked.
The key components of Blockchain: The key components of a blockchain are Cryptography, P2P Network, Consensus Mechanism, Ledger, Validity rules.
Author: Ouarda BOUZIANE, Founder CEO Eurobreath.IT, March 16, 2021