What Is a Blockchain? 

The year 2021 was very exciting for the entire blockchain space. Let’s talk about the top buzzwords that made huge headlines in the year 2021. Let’s first get some background on Blockchain..

1. What is Blockchain?

A blockchain is a distributed database that is used to share data among computer nodes. Blockchain stores massive amounts of data electronically in digital format as its own database. When we talk about cryptocurrency systems, blockchains play a crucial role, such as Bitcoin, mostly for maintaining a secure and decentralized transaction record of data and thereafter generating trust without trusting or depending on a third party.

Differentiating a typical blockchain from a database is how the data is structured. A fresh block is created as the new data comes in. A blockchain stores data in the form of blocks that are linked together by cryptography. To elaborate, blocks hold a set of information, and that information is collected in the form of groups by Blockchain. Blocks have huge storage capacities and, when completely filled, are closed and then linked to the previous filled block, and that’s how a chain of data is formed, known as a blockchain. And furthermore, all the new information that follows that recently added block is compiled into a newly formed block that will then also be added to the chain once filled.

Heading towards the third decade of blockchain, catching up on this technology, even the inherent companies could fail. Do you want to know why?

Today, we can see the propagation of NFTs and the tokenization of assets. When we talk about the application for this technology, it’s already being executed and explored. Because of Bitcoin and cryptocurrency, Blockchain is making a name for itself all because of Bitcoin and cryptocurrency. 

This has proved to be on the tongue of every investor as a buzzword that blockchain has successfully made a huge space for businesses and operations of government with few middlemen and with accuracy, security, efficiency, and less vulnerability. The next decades will prove to be an important period of growth for blockchain.

Talking about Bitcoin and Ethereum, which are cryptocurrencies which are underpinned by blockchain technology, This adoption of blockchain and the technology and products it supports will continue to impact business operations dramatically. The cryptocurrency market cap reached $3 trillion by the end of 2021, the highest of all time.

But blockchain technology is more of a system for securely transferring cryptocurrencies.Other than finance, it can also be used in applications such as welfare benefits, gambling, voting, healthcare, insurance, and artist royalties. With this huge technology impact on business and society on various levels, here comes the blockchain revolution.

If the word “revolution” sounds dramatic, think of the eight of the world’s 10 largest companies that are building a foundation of products incorporating blockchain. Lets talk about the first Buzzword.

#1. NFT

A type of digital asset that uses blockchain to claim the ownership of items such as images or videos. Well, you can always take a screenshot, but the real thing is always real. Recently, Ferrari also joined the NFT space to create digital content for its fans.

In 2021, the record sales broke for a non-fungible token in March at a Christie’s auction, where an artist named Beeple sold his work for a whopping $69.3 million. The phenomenon has grown since then.

Recently, Ferrari also joined the NFT space to create digital content for its fans.

Sportswear giant Adidas earned $23.5 million by highest sales of 30,000 of Adidas.Meantime, Adidas competitor Nike has also filed seven trademark applications, preparing itself to enter the metaverse. 

Maintaining a clear intention to create and sell virtual branded sneakers and apparel, Initially, there was speculation around these digital assets, but as the year 2021 ends, the absolute number of involved projects in NFTs has changed the game.

A recent report by Cointelegraph revealed that people have spent over $9 billion on NFT sales so far—and total sales are expected to reach $17.7 billion by the end of 2021. The research states that sales of NFTs have grown from $41 million in 2018 to $2.5 billion in the first half of 2021.

#2. DeFi

It’s short for “Decentralized Finance,” where customers can leverage all financial products like lending, borrowing, and stacking directly on the blockchain network. I know this might sound weird for many of you, but investors and traders are constantly using platforms like UniSwap, PancakeSwap, OlympusDAO, AAVE, and many more for better interest rates or APY of up to 70000%. The current market cap of all DeFi Tokens is $178 billion, and the trading volume is $15 billion.

When we talk about alternate financial infrastructure, It gives a huge introduction to the blockchain with cryptocurrencies. It has become very convenient for people to transact without any third party or a middleman, acting as a validating agent with blockchain technology.

Let’s move to an example where Ethereum is the pioneer that has made DeFi a hero to the world. 1.7 billion adults are facing the problem of unbanking, and having said that, financial experts are raising their fingers at stumbling blocks in the banking system. Taking it further to the topic, the judgment of people regarding the legacy model  shows visibility towards lack of transparency in the system.

When we look at the unbanked population of the world, DeFi projects are offering newer solutions. Working high on removal of system buffers, bringing high transparency, and improving the transaction speed and its cost, DeFi projects are highly in the resolution part.

Introducing the world to fresh technological tools like digital assets, smart contracts, and dApps, the Ethereum blockchain ecosystem has marked its standards. Decentralized financial projects became a core component of decentralized financial projects. The DeFi projects achieved mainstream success by solving the major flaws of the legacy system.

#3. DAO

It’s short for “Decentralized Autonomous Organization.” It’s an organization with no central authority, and decisions are made via proposals in the community. Recently, Uniswap decided to move from the Ethereum blockchain to Polygon Blockchain through the same DAO proposal, where a majority of token holders voted for the Polygon network to get reduced transaction fees and some more benefits.

When we talk about it, centralized financial organizations play a massive role. These organizations serve as administrative entities that manage the core financial operations, such as fundraising, managing assets, and implementing governance. Solving the same goals, the Ethereum blockchain ecosystem has introduced decentralized organizations to serve. Having said that, DAOs’ behavior is by nature decentralized and neither adheres to the boundaries imposed by authorities nor central government. ADO can have a numerically large purpose without hierarchical management. Charitable organizations where members approve donations and venture capital firms owned by a group are all possible with these organizations because freelancer networks get their contract funds to pay the subscriptions.

#3. DAO’s problem-solving methods

  • With top-down governing bodies in place, the majority of modern businesses are still centralized. With only a few in charge of the influential processes, organizational proposals change to facilitate the affecting of their units or employees, which aren’t transparent.
  • As an internet and blockchain native entity (DAO), several advantages over traditional businesses are offered. While explaining this, we could write an entire whitepaper to explain the advantages. Summing up, here are two points of explanation.

According to DeepDAO, DAOs are already significant, and the market valuation is $13 billion. UNI, MKR, and CRV are worth grabbing the attention of investors who are optimistic. Billionaire Mark Cuban believes that the future of legacy businesses is all over DAOs. Uniswap (UNI) is led by 2,75,000 members in their ecosystem. According to Mark Cuban, ‘trustless’ can surely pay’ in the long run.

Blockchain is finally making a big name for itself, thanks in large part to bitcoin and cryptocurrency.Blockchain has made a huge stand to make government operations and business more accurate, secure, efficient, cheap, transparent, and with no middlemen fundamentals; a buzzword on every investor’s tongue in the nation. Heading towards blockchain’s third decade, the legacy companies have no doubt about catching-up on technology; the only question is when. Today, the trend is towards NFTs and the tokenization of assets. The upcoming decades will be in a position to prove to be an important period in the growth of blockchain.

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