Today’s topic of discussion is quite intriguing. This is a question that people who create content about Web3, Cryptocurrencies, and dApps may have been asked at least once or twice by the community. While using the Ethereum or Polygon networks may appear simple to the typical user, determining who owns these networks might be difficult for newcomers.
To address this question, we must first grasp a few concepts regarding blockchains, which, unlike traditional databases, store data electronically in digital format across a network of connected computers. In exchange for the block reward, network participants validate transactions and maintain the ledger. The data stored in a blockchain is visible publicly through a transaction hash. Now if all of that sounds confusing, let’s start breaking it down into simple words.
What Is a Blockchain?
A blockchain is a decentralized database that is shared across computer networks called nodes. A blockchain acts as a database, storing information in a digital format.
Blockchains are well recognized for their critical function in keeping a secure and decentralized record of transactions in cryptocurrency systems like Bitcoin. The integrity of data is achieved by the power of a community, whatever the majority says is true data.
- The ownership of a blockchain network can vary depending on the nature of the blockchain. Whether the network is a public blockchain or a private one. Blockchains can be permissionless and permissioned.
- In the case of Bitcoin and Ethereum, the network is a permissionless implementation. Anyone can suggest changes to the blockchain protocol and the community gets to choose what should be implemented and what shouldn’t.
- In case of RBI or Federal Reserve launches their own version of CBDCs, the network will be a permissioned one and the ownership won’t be public. Private blockchains already exist today but the data in those networks can be reversed or modified by the central authority.
- Blockchains are a type of shared database which differs from a typical database by the way information is stored. Blocks store the data in a blockchain and they are linked together via cryptography.
- Blockchains can be private or public which determines their ownership. Bitcoin and Ethereum for example are public blockchains wherein the transactions are visible publicly and a single person or entity can’t modify the network.
- Blockchains may hold a variety of data, but the most prevalent use case so far has been as a ledger for transactions and land ownership.
- Bitcoin’s blockchain is used in a decentralized way so that no single person or group has control rather, all users collectively retain control.
- Decentralized blockchains are immutable which means that the data entered is irreversible. In the case of Bitcoin, if the transaction happens to go to the wrong person, the sender can’t do anything about it.
Who verifies the network transactions?
A public blockchain’s purpose is to allow digital information to be recorded and distributed without the intervention of a central authority acting as a middleman. The transactions are open to the public, but they can’t be changed. A blockchain, in this sense, is the foundation of immutable ledgers, or records of transactions that cannot be changed, deleted, or destroyed. They’re also known as distributed ledger technology because of this.
The blocks in a blockchain are always stored linearly and chronologically. They are always added to the end of the blockchain and once it’s added, it is extremely difficult to go back and alter the contents of a block unless a majority of the network participants agree to alter the contents.
Each block has a unique hash along with the hash of the previous block. It is very similar to a linked list data structure. These hash codes are created by a mathematical function that turns digital information into a string of numbers and letters. If the information is altered in any way, the hash changes for the block.
Risk of hacks
Let’s say that a hacker, who also runs a node on the blockchain network wants to alter the blockchain and steal Bitcoins from everyone else. If they were to alter their copy of the blockchain, it would no longer match with everyone else’s copy and the one standing out would be cast away as illegitimate.
If someone wished to take over the network, that hacker will simultaneously need to control and alter 51% or more of the copies of the blockchain so that their copy becomes the majority copy and thus the agreed-upon chain.
Such an attack would also require an insane amount of money and computing resources as they would need to redo all the blocks with the new timestamps and hash codes. Due to the size of cryptocurrency networks, other participants would see such drastic alterations immediately and fork to a new version of the chain which would cause the price of the attacked tokens to plummet immediately making the entire hack pointless.
Blockchains vs. Banks
Unlike banks operating only during fixed hours, blockchains are live all-around the clock. Hence blockchain technology has often been called out as a disruption to traditional banking. They not only make cross-border payments faster but also cheaper to process by maintaining the privacy and safety of users.
Blockchain networks can’t be seized either due to the size of the network. If someone wished to take over the network or the wallet, it would be too difficult to proceed.
Thanks to Ethereum Push Notification Service
You may have already noticed that we don’t serve any ads on our website. That’s because of awesome projects like EPNS which help us sustain the website. If you don’t know about them already, it’s a decentralized Web 3.0-based notification platform. Unlike Android or iOS notifications, EPNS uses a decentralized approach to send alerts about your activities on DEXs and platforms like CoinDesk, MakerDAO, BTC Tracker, and more.
How to get started?
- Firstly, you’ll need to have a wallet like Metamask, WalletConnect, etc.
- You can then download the EPNS application from Play Store or App Store and sign up using the Wallet ID.
- If you’re like me, a Browser Extension must look like your favorite option.
- Go to the available notification channels.
- Click on “Opt-In” & Sign the popup. It’s free and doesn’t take any gas.
- That’s it.
The best part, EPNS is already working on a Wallet to Wallet messaging service. If you haven’t checked them already go now!