Four weeks into the Web3Ladies program, and it’s safe to say gaining light on a subject matter that always seemed dark and terrifying gives one a different level of confidence. At least, I can attest to that.

Overtime, I’ve had a couple of friends explain the concept of blockchain and cryptocurrency to me. Sadly, never once did I correctly grasp the idea. The narrative has changed now, and I’d be sharing a bit of my knowledge. Hopefully this helps someone like me out there.

BLOCKCHAIN A blockchain is a distributed database. A database is usually stored in tables. A blockchain, on the other hand, differs from a typical database in the format in which its data is stored. A blockchain stores data in a structured format grouped into blocks. Each block containing a unique hash in a chronological pattern is then linked to another to form a decentralized pattern such that the database is shared amongst the nodes of a computer network. The essence of this decentralization is to maintain the fidelity of the data stored and to establish a transparent record.

Typical databases are controlled by the central authority. If we say then that blockchain is decentralized, it means there’s no central authority. Thus, on a blockchain, before data can be entered into a block, it needs to be agreed upon by other decentralized networks through a consensus mechanism known as Proof of Work or Proof of Stake, depending on the blockchain technology adopted.

What then is "Proof Of Work" (POW) or "Proof Of Stake" (PoS)?

A little knowledge about mining would be required to understand what the difference is between proof of work and proof of stake. In proof-of-work, cryptocurrency transactions are verified through mining. Proof-of-work requires a significant amount of energy to verify transactions. Proof of stake implements randomly chosen validators to make sure the transaction is reliable. Here, validators are selected based on a set of rules depending on their "stake" in the blockchain. It usually requires an enormous initial investment.

Although proof of work is currently being used by the bitcoin and ethereum blockchain, Proof of stake has a higher advantage over proof of work. With proof of stake, Sybil attack by users is prevented as validators loose their stake and are prevented from future participation once any malicious activity is traced down to them. This consensus mechanism is incorporated to ensure blockchain integrity is maintained and double spending is avoided.

Blockchain Transaction

Blockchain inspite of its mechanism and technicality is of little or no essence on its own. Blockchains need inputs to make it useful. These inputs are transactions. Blockchain transactions are cryptographically signed instructions from accounts. This transaction itself is a transfer of value in the blockchain. This implies a transaction on a blockchain should have a recipient, Signature, Value, Gas limits and Data itself. Like every other platform that requires payment, each blockchain has its native currency for making payments. This transaction fee is computed based on the steps involved in verifying a transaction. The means of calculating the amount of steps involved or in simpler terms, the cost for running this transaction on a blockchain is called Gas. So, transaction fee is the cost of gas associated with running a transaction on a blockchain. Often time, this gas fee increases due to network congestion. So the concept of gas is to allow denial of service.

Adoption of blockchain by many sectors has been on the increase lately. This is due to the pros that come with its adoption, some of which include:

Improved accuracy and efficient transactions—blockchain eliminates human error, time consumption and stress associated with records. Transparency: Because record keeping is decentralized, users have access to data inputs. Security-blockchain through the use of unique keys has allowed for greater user privacy, which heightens security.

This and other reasons justify the reason why blockchain adoption is on the increase. The blockchain concept extends beyond this. However, understanding the genesis as stated above would help solidify one’s understanding as you level up.

It’s only the beginning and I've already acquired this much. Much gratitude to web3ladies, the instructors, team members, and mentors for being a part of this journey. Sooner than later, I hope to share moe beyond this scope.