dtjones

@dtjones@lemmy.world

• ⁨Comment⁩ on ⁨Please Stop⁩ ⁨⁨8⁩ ⁨months⁩ ago⁩:

  The blockchain is essentially a ledger that tracks transactions (including the creation of currency). One thing that is not always clear is how important it is for a blockchain to be decentralized. When I say “decentralized,” I mean that many different people are operating a server that performs transactions on a larger network. These people are rewarded in currency for their efforts, and are sometimes referred to as “miners,” though this term is changing somewhat.

  There are thousands of these servers in a network that are operating on and tracking the ledger for blockchains like Bitcoin or Ethereum. Any updates to the ledger are verified by all of these nodes. As long as 51% of nodes can verify a transaction, it will be added to the ledger. This means that as long as someone doesn’t own 51% of the network, they can’t just inject whatever transactions they want (i.e., fraudulent activity). In practice, this makes these networks very resilient to fraud.

  I think this paves the way for a lot of the practical examples you’re looking for. For example, there’s no way for the network to decide to just give tons of money to a single entity for some “economic policy” like Too Big to Fail (i.e., corporate bailouts). This means you don’t have to wake up one morning worrying about whether or not your currency will rapidly inflate because of things like corruption. Another example is the true ownership of digital assets. NFTs have (rightly) gotten a lot of flack for being overpriced JPEGs, but there are real use cases here. A random middleman can’t just decide to price gouge because they own all the tickets first (Ticketmaster). Instead, artists can mint tickets on the blockchain (very important: this ensures authenticity) and then fans can buy them on the blockchain - no middle man required. You still show a QR code at the door for verification like you would now.