Is Block Chain Technology the next dot com bubble? The hype of Block Chain Technology is growing exponentially ,and the world is seeing a huge number of startups in the blockchain sector. Venture Capitalists favoring the blockchain startups is just another signal. Block Chain technology is transparent and decentralized, immutable, and secure.
In 2008 A.D, the United States of America saw a financial crisis resulting in a great recession throughout the world. But whose fault led the U.S.A to the well of financial crisis–the traditional banking system. In traditional banking system, only certain authorities have authorization to look upon the transactions done by people. Hence, making the traditional banking system less transparent and favorable to only one percent of population. However, in Block Chain Technology every person that is participating in the blockchain technology has access to transactions ,but without linking the transaction with people. Similar to the stock market where we can see the number of stocks listed in buy and sell dashboard but not the person behind it. Therefore, making the blockchain technology more transparent than the traditional privacy model.
In 2020,the amount of data in the world was estimated to be 44 zettabytes. However, only few companies have access to it resulting in centralization of our data. And there is saying "If you are not paying for the product ,you are the product". Our data that these companies store in their database are used to show us targeted advertisement. In addition, only few companies having access to such huge number of data is not healthy ,they might use our data for some unethical work, and might tempered with the user data resulting in fabricated record of the user. Nonetheless, in blockchain technology we have the sole right to our data. Even if we have to see the advertisement, we get paid. For example, in Brave Browser which is considered to be web3.0 browser rewards the user in token for the advertisement we are seeing on the browser.
In Block Chain Technology, every block has a previous hash meaning a simple change in any block would make the chain of blocks invalid eventually making the node participating in the blockchain technology invalid. In order to temper the user data there has to be more number of dishonest nodes than the honest nodes. Hence, making the technology more decentralized. Moreover, Immutability is another key feature of blockchain technology that segregate its from traditional technology . As I already said, every block in the chain of blocks has hash of previous block making it more difficult for hackers to change the transaction of the users. let's suppose ,a person is buying a certain goods online ,the delivery of the goods is done instantly. After purchasing the goods ,the assumed person sent a token equivalent to certain amount of money .And at the same time ,the person forked the node and ran the node remotely .The person also did a certain transaction that reverts the token to his/her digital wallet ,resulting in double spending .However ,in bitcoin for example ,whenever the person would try to link the remote node to the existing bitcoin technology the other nodes would try to validate the node that the assumed person is trying to link .In this case ,the node that assumed person has fabricated would be of smaller size in terms of blocks compare to other honest nodes .Hence ,the node would be invalid and cannot be part of the chain .Therefore ,making the blockchain immutable and more secure. Nonetheless, with the consensus mechanisms a certain change can be made ,but it would come at great cost.
In my opinion, blockchain technology is a revolution to bring democracy in the current technology. The blockchain technology also solves the several loopholes that exist in our financial system. The technology has some flaws too which will be addressed with time to make it more reliable for the users. However, the technology is not a Ponzi scheme in itself.
Note: This essay does not provide a detailed explanation of the blockchain technology ,since it would be lengthy and boring. However, I would try to bring other essays regarding different blockchain terms in the coming days .Stay tuned!!