Homework Task of Tron Fan Club Tutorial || Basic understanding of Cryptocurrency and Blockchain Technology.

Hello Tron Fan, I am happy to participate in yet another homework task based on tutorials material provided by professor @engrsayful which I must say a big thank you to for such an easy to understand materials. I will be answering the questions base on my understanding and I hope it will be enough to be among the winners in this week assignment.

Image Source

Q1. Explain the security feature of blockchain.

Answer

There has been many attempt to create a virtual currency but all failed. But with the introduction of blockchain technology, the hope is back on track. So I can say blockchain is the engine room to the functionality of all cryptocurrencies. From its name you can begin to have an idea of how it works. It is essentially a sets of linked blocks which each set of block contains a number of transactions that has been individually verified by each member of the network which are spread around the world. For every new block created it has to be verified by each block on the network before been accepted, so with this kind of verification of new blocks it impossible to forge transaction histories.

Image Source

With this feature of not been able to alter any information or data on the block, this create a trust within blockchain users and this is different in a centralized way of storing information where the top management can tamper with any information for they own benefit.

Q2. What do you mean by mining in Blockchain?

Answer

Mining in blockchain is different from mining cryptocurrencies. To mine in blockchain you have to be among member who runs the blockchain server. The major advantage of blockchain is it decentralized feature which provide a top notch security and trust. For the decentralization to work effectively when new block are added to the chain, they must be verified by members who run the server so for they struggle in ensuring the blockchain is secure, these members are given a token as appreciation and this is what is called mining in blockchain.

Image Source

So when a block is filled, a new block is created which contain information about transactions and has its own harsh so for the new block to be accepted and into the blockchain it need to be first verify by nodes which are computer located at various location around the world before the new block can be marge to the previous block which is already part of the blockchain.

Q3. What do you mean by DPoS system of mining? And differentiate between Proof of Stake and Proof of work.

Answer

Delegated Proof of Stake (DPoS) is the third system of mining after POW and POS and it is similar to POS. in this system of mining, miners are picked on users choices. It just like a democracy system of government where the citizen of a country select their leaders through voting. DPoS is no different here, we vote for different miners and the ones with the highest vote will be allow to mine.

A good example of DPoS is this very platform Steemit. The miner we know them as witnesses and only 20 wittiness are allow to mine within a period of time before the next selection or let me say election is conducted to select new miners.

Differentiate between Proof of Stake and Proof of work .

Image Source

Proof of work (POW) and proof of state (POS) are both blockchain consensus Algorithms which helps to promote transparency at the highest security possible by decentralization. They both help to ensure the right transaction is verify before joining the blockchain. There are other consensus algorithm but POW and POS are the most commonly used in the blockchain. They is no better way to know the difference between POW and POS than to know they meaning and how they work.

-Proof of work (POW)

POW became popular with the introduction of bitcoin blockchain. After been successful in bitcoin, it is consider as the best consensus Algorithms, because of the way it achieves its decentralization and the way it authenticate transaction.
POW works by allowing miners to solve puzzle which in turn, create a hush function for an incoming block which contain transactions in the blockchain ecosystem. If the puzzle is gotten correctly, the miners are been rewarded with the right token (cryptocurrency) depending on the blockchain including transactions charges.

Image Source

Form the explanation above, it may seem as an easy task which can be carried by anyone but mind you, the puzzle been asked to solve are very complicated which require some serious computing to be able to solve it.

WHILE

-Proof of Stake (POS)

This is the second consensus algorithms and it was created to eliminate some problem encountered in POW. One of the major problem miner’s face in POW is that, it require a lot of energy to determine the series of blockchain.

POS Algorithm in the other hand, uses a protocol which concentrate its attention on the highest owner of a specific coin. Example, instant of solving complex puzzle the power is given to the highest holder of the coin. So by using this method, it was observed that they are fewer miners in POS compere to POW, but validators are selected based on the amount or their share on the network. In POS validating does not mean you get reward but rather, they sign them and suggest it to the block to be validate.

Image Source

Q4. Why is boundary less trading important?

Answer

Boundary less trading is a situation where anyone in the world can trade irrespective of currencies, border, religion, race, gender and government. In our world today they is conflict in almost all part you look at. All these are hindering the world economy to grow because when one of the world “superpower” place a sanction on a particular country, him and his allies will not be able to perform any business activities with the sanctioned country. And we can many countries are currently been sanctioned. They is this saying I like that goes like

” Money makes the world go round; however, happiness greases the axle. Without this lubricant, life will seize ” Quote Source

but from what we are witnessing around the world it seem like the world only round in some particular country.

Currency like the USD, Pound and Euro has dominated the world market that if these currencies are in short supply the world economy will be heavily affected. The good news is we now have a solution where we don’t need to depend on a specific currency to trade. Cryptocurrency has produce an opportunity that you alone will be in charge of your own money. With blockchain technology been decentralized we don’t have to fear any sanction from any government.

Image Source

In my opinion I think crypto trading will soon completely change the way we trade around the world because it faster due to the absent of third party and very secure due to blockchain technology so if you do not know how cryptocurrency works I will advise you to pick up you phone and start researching on it now.

Q5. Differentiate between Cryptocurrency and blockchain.

Answer

What is a cryptocurrency?

Cryptocurrency came from the work cryptography. Cryptography comprises of two words, the word “Crypto” means secret and “graphy” is a Greek which means writing. While a currency can be define as money of any item of value which can be used to facilitate transactions.

I will define crypotocurrency as a virtual or digital currency, and it is protected by cryptography, and this protection makes it almost impossible to fake or False.

Image Source
Most cryptocurrencies uses decentralized networks which is based on blockchain technology. Blockchain technology is a means of distributing records through several linked network (computer) in form of blocks. More details about blockchain is explained below.

WHILE

Blockchain can be define as the technology which helps in storing or keeping transactions made over a given cryptocurrency it can be seen as ledger in our various businesses and this technology is so vital to the success of cryptocurrency.

Image Source

Blockchine technology is what make cryptocurrency wildly acceptable because of the trust it brings.

Thank you all for reading see you in the next assignment. Stay safe

NOTE: 10% Author reward goes to the community account.