Individual essay nguyendangminhtri AEN T122WSB 6 21000960

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Nguyễn Đăng Minh Trí
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Individual Essay
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21000960

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Mr Ryan

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Title:
What is blockchain and how it is utilized?
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1200
date:
11/4/2022
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11/4/2022

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What is blockchain and how it is utilized?

Nguyen Dang Minh Tri - 21000960

AEn-T122WSB-6
11/4/2002

Mr.Ryan Gabriel


In today's technologically advanced world, the need for modernization is increasing. The increasing usage
of technology is showing signs of improvement. Blockchain technology introduced its first widespread
application, Bitcoin, in 2009. Since then, the use of blockchains has increased as a result of the development
of various applications such as cryptocurrencies, decentralized finance (DeFi) applications, non-fungible
tokens (NFTs), and smart contracts. Blockchains are best known for maintaining a secure and decentralized
record of transactions, which makes it hard to change or manipulate the data. On the other hand, blockchain
also has many risks and limitations, such as its low transactions per second or its data storage limitation.
This essay mainly focuses on the definition of blockchain, how it is used, and the benefits and drawbacks of
blockchain in the age of technological development.


A blockchain can be defined as a distributed database that is shared among the nodes of a computer
network. A blockchain acts as a database, storing information in a digital format. However, there is one
difference between a database and a blockchain. According to Adam Hayes (2022), the difference between a
typical database and a blockchain is how the data is structured. A blockchain organizes data into groupings
called "blocks," each of which contains a collection of data. The data is structured into blocks, once the data

fills the block, the block will chain onto the previous block. Which causes the data to be linked in a
chronological order. Whereas a typical database structures its data into tables. The concept of blockchain
was outlined in 1991 by researchers Stuart Haber and W. Scott Stornetta in a paper called " How to
Timestamp a Digital Document". However, until January 2009, blockchain technology had its first real
application, Bitcoin. Bitcoin’s creator wants to create a digital currency that would allow two strangers to
transact online without the need for a third party like a credit card company or a payment processor.
Actualizing this plan requires a system that would eliminate the " double spending" problem, which is when
people use the same money more than once. They solve the problem by creating a network that continually
checks Bitcoin's movement. The Blockchain is that network. The main concept is a public ledger with
copies distributed among several nodes, which are usually individual computers that have copies of the
ledger (John, 2022).


Blockchain technology has many benefits as it has many useful applications. But there are also many
disadvantages. First, blockchain technology has a high level of security. The blockchain network must
verify the legitimacy of a transaction after it has been recorded. Now, thousands of computers on the
blockchain scramble to verify that the purchase's data is correct. The transaction is added to the blockchain
block after it has been validated by a computer. Each block on the blockchain has its own unique hash, as
well as the hash of the previous block. The hash code of a block changes when the information on it is
changed in any way. The hash code of the block after it does not. Because of that, it's difficult to change
information on the blockchain without being noticed. Also, blockchain can reduce transaction fees. The
blockchain eliminates the need for third-party verification, as well as the fees that come with it. Moreover,
the majority of blockchains are made up entirely of open-source software, meaning that everyone can view
their code. This allows auditors to check the security of cryptocurrencies like Bitcoin, and anyone can
suggest changes or improvements to this blockchain system. On the other hand, Blockchain also has some
limitations. Although blockchain can save customers money on transaction costs, it is not a free technology.
Despite the high costs of mining bitcoin, consumers continue to utilize more electricity to validate
blockchain transactions. That's because miners are compensated with enough bitcoin for their time and
effort when they add a block to the bitcoin blockchain. However, miners will need to be compensated or
otherwise incentivized to validate transactions on blockchains that do not use cryptocurrencies. Also, there

are many illegal trading and activities on the blockchain network. The Silk Road, an online dark web
illegal-drug and money laundering bazaar that operated from February 2011 until October 2013, when it
was shut down by the FBI, is possibly the most referenced example of blockchain being used for unlawful
transactions ( Adam, 2022). This system has both advantages and disadvantages. It allows anyone to access
financial accounts, but it also makes it easier for criminals to transact. Many have claimed that the positive
uses of cryptocurrencies, such as banking the unbanked, outweigh the negative uses, especially as the
majority of unlawful behavior is still carried out using untraceable cash.


Since 2009, the use of blockchain technology has increased due to the development of various applications.
Blockchain applications are far more than just bitcoin and cryptocurrency. With its ability to increase
openness and fairness while also saving businesses time and money, technology is influencing a wide range
of industries in ways ranging from contract enforcement to government efficiency (Daley, 2018). There are
some popular blockchain applications that everyone has heard of once. One of the most important
applications of blockchain is cryptocurrency. More than 10,000 more cryptocurrency systems are now
running on the blockchain. The Blockchain allows Bitcoin and other cryptocurrencies to operate without the
need for a central authority by distributing their operations over a network of computers. This not only
lowers risk, but it also removes a lot of the transaction and processing fees. Another application of the
blockchain is non-fungible tokens, or NFTs. Non-fungible tokens are frequently thought of as a method for
acquiring the rights to digital art. Because the blockchain prevents data from being duplicated, placing an
NFT on the blockchain ensures that only one copy of a work of digital art exists. This might make you feel
like you're buying tangible art, but without the hassles of storage and upkeep. One application that we rarely
see is voting. Only eligible voters may vote, and votes cannot be tampered with if blockchain technology is
used. Moreover, it can make voting as simple as hitting a few buttons on your smartphone, thus increasing
voter participation. Simultaneously, the cost of holding an election would be significantly reduced.
Blockchain technology can be used in Logistics and supply chain tracking. Blockchain technology has the
potential to secure Internet of Things networks.The Internet of Things (IoT) is making our lives simpler, but
it's also allowing unscrupulous actors access to our data and control over critical systems. By storing
passwords and other data on a decentralized network rather than a single server, blockchain technology can
provide greater security. Additionally, because a blockchain is basically unchangeable, it provides

protection against data manipulation.


In conclusion, blockchain technology has numerous advantages but also has many drawbacks. Thanks in no
small part to bitcoin and cryptocurrencies, blockchain is finally gaining a reputation for itself, with many
practical uses for the technology already being implemented and researched. Blockchain technology has the
potential to make corporate and government operations more precise, efficient, secure, and affordable. It
also reduces costs by eliminating third parties. In the future, more and more applications of blockchain
technology will appear as the blockchain technology ecosystem rapidly changes.


Reference list

Daley, S. (2018, December 5). 25 blockchain applications & real-world use cases disrupting the status quo.
Built In. />Hayes, A. (2022, February 16). Blockchain, Explained. Investopedia.
/>John, B. (2022, January 24). What Is the Blockchain and What’s it Used For? PCMAG.
/>Levy, A. (2021, October 25). 15 Applications for Blockchain Technology. The Motley Fool.
/>What is a blockchain? (n.d.). Www.coinbase.com. />
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