When it comes to blockchain technology, btc comes to mind first and its first application to explain is based on digital currencies, bitcoin. Bitcoin is the first and most popular example of blockchain technology. It is also the most controversial product because it allows the creation of a multibillion-dollar market without any state control. However, there are systems that do not cover this definition and are still classified as Blockchain. One of the definitions made as an alternative belongs to Ethereum founder Vitalik Buterin. In his description:
“Blockchain is a magic computer where anyone can install programs, leave these programs to work on their own, and work in a way that everyone can see all the instant and past status of the programs installed. This computer ensured that programs operate in accordance with the protocol by maintaining very strong krpitographic methods.”
Although Buterin’s definition is not a very technical definition and does not contain Bitcoin in it, he has explained the general lines of Blockchain technology in a beautiful way.
Blockchain is a notebook or verbase that has been distributed throughout the network on which it is located and where transactions are recorded. It is not under the leadership of any central authority to ensure that the transactions are safer. Each transaction is approved by “miners” that dissolve a complex cryptograph to add a new block to the blockchain, namely the custom nodes within the network. Each block contains some information within the previous block. That’s why the whole chain is chronologically sorted and it is almost impossible to change. Operations within the blockchain network can be seen and cannot be changed to everyone within the network. This definition is the broadest definition that contains all plug-ins of blockchain.
In the 2008 global crisis, a great distrust of the “central” institutions that regulate the banking and financial sector emerged. It is not known whether it was a very interesting coincidence or a particularly chosen time, but just a few months after the sinking of very large and trusted banks in this global crisis, one person or group under the pseudonym “Satoshi Nakamoto” published an article under the pseudonym “Bitcoin: Peer-to-Peer Electronic Cash Payment System”. In this article, Blokchain first appeared as a technology that is necessary for Bitcoin to work in accordance with its definition. However, we know today that the conceptual foundations of Blockchain were laid with 3 different articles written in the 90’s. These are:
- Stuart News and W. Scott Stornetta prepared in 1991, and how to use documents with crypto signatures with the timestamp,
- A decentralized data storage system by Ross Anderson, from 1996 that recorded updates cannot be deleted,
- Articles from Bruce Schneier and John Kelsey describe how to use encryption to protect sensitive information contained in log files from 1998 that are held on untrusted machines.
By combining certain concepts created before, Satoshi Nakamoto has added “Blockchain” technology to our lives, as it is generally accepted. Essentially, Blockchain can be defined as a distributed database of records, a public ledger of all transactions, or digital events that are run and shared among all participants in the network. Blockchain contains absolute and approved records of each transaction that is made on it.
Despite the controversy about Bitcoin, Blockchain technology itself has been working unquestionably and seamlessly for years and has been successfully integrated into the financial and non-financial applications in the world. Marc Andreessen, who has been seen as the prayer of Silicon Valley capitalists in recent years, listed blockchain’s disbanded memorandum of understanding as the most important invention since the Internet. Johann Palychata, who is in charge of security services at BNP Pariba, wrote in quintessence magazine that the software that allows digital coins, i.e. blockchain technology, should be considered as an invention with the potential to transform the financial world and beyond, such as steam machines and internal combustion engines.
Although blockchain technology is predominantly digital money in popular media, the application area is not limited to digital finance. The variety of application areas we have seen so far stems from two key features of distributed systems built on this technology. First, transaction records stored as distributed in the system cannot be changed later without being noticed by system members. Second, the system cannot be shut down by a central authority because all members must be shut down to shut down the system.
Although there is still uncertainty about transactions in blockchain systems and legal regulations on smart contracts, many companies of all sizes business models and usage scenarios that will benefit from technology.
It is important to understand that blockchain is not only about digital currencies, as people perceive, but also its characteristics such as distributed structure, data security and transparency, as well as the use of technologies such as compromise protocols, security structures and smart contracts. For example, consider ingethuation of this technology in the public domain can provide more transparent, fair, efficient and auditable ideal, desirable management. In the paperwork, a crime called forgery may come out of the literature, there may be no suspicion of cheating in the elections, according to his man, the concept of processing may not be favoritism, and more egalitarian nationalities can be provided. All of this can be achieved by the inability to change the data provided by this technology and transparency, pluralism, auditability. Interestingly, the inability to change data can also cause major problems in the field, so accurate data entry is important. Or more problems such as access ing private information, but these are not problems that cannot be overcome with more flexible designs and technical solutions. NGO of validator nodes, University, Association, Citizen… The idea of a v.s. sounds very democratic.
Today’s digital economy system is built on the basis of trust in absolute authority. All digital transactions rely on us to trust someone to tell us the truth. This can sometimes be an e-mail service provider who tells us that the e-mail we send to us, or a bank that tells us that the money we send to our loved ones in distant lands has been forwarded. Examples can be replicated. In fact, we live our lives in the digital world in a way that is not very reliable, relying on third parties for the safety and privacy of our digital assets. Because these third resources can be attacked or manipulated. The point where blockchain technology is useful starts right here. It has the potential to be a revolution for the digital world with the “Distributed Reconciliation” structure, which allows each transaction, which includes digital assets over the internet at any time in the future, to confirm its accuracy. Moreover, it does so without compromising the privacy of the entities and parties in the process. “Distributed Reconciliation” and “lack of identity” are two important characteristics of blockchain technology. Blockchain has the potential to be a locomotive for the development of the digital economy, which is constantly increasing internet use to manage our digital trading transactions and where we share events or personal data in our lives
Thanks to blockchain, people no longer need a third-party agent to provide security and verification for product or service transfer transactions. The “trust protocol” created by blockchain offers a reliable, transparent and accountable environment. Blockchain is the basis for security thanks to decentralized distributed data structures for users. As the Internet makes communication very easy worldwide, the world has become increasingly interconnected, and technologies such as smartphones, internet of things, smart contracts have become increasingly popular. In the future, where these technologies will be included, blockchain will be an important tool for increasing the power of the network between people, applications and objects/
Advantages of blockchain
- A copy of the data is saved by all stakeholders, so anyone can access that data and see the actions performed. Data loss and data destruction are prevented by storing data in this way.
- Digital signatures and verifications ensure that their stakeholders trust each other without the need for intermediaries.
- Everyone can see both the status of their transaction and details of all transactions in the blockchain, ensuring transparency.
- Data on blockchain cannot be modified or deleted.
- It can operate without central authority, it cannot be controlled, canceled or closed due to its distributed structure.
- Certain activities can be automated thanks to smart contracts.
Disadvantages of blockchain
- As a reconciliation protocol, a lot of energy is consumed in blockchains that use proof of work and very expensive computer systems are run.
- All data in the blockchain is stored separately on each node, and the consistency of the data on these nodes is ensured after each process. For example, adding a block to the chain takes 10–60 minutes in the Bitcoin chain and 15 seconds in the Ethereum chain. Therefore, it is inadequate compared to traditional databases and performance.
- The ability of each node on the network to store a copy of all data and access its contents may damage users’ privacy.
- Smart contracts cannot be changed once they are created and are stored in the blockchain open to everyone. This could leave smart contracts vulnerable to malicious attacks.
The AVALANCHE protocol
So far, those who are just curious about blockchain technology are the ones who are the only ones who are curious about the blockchain technology. He has more or less understood that this technology will mark this century, from public to private sector, from finance to industry and in the social sphere. When we talked about blockchain, we thought btc and nakamato protocol, and the Blockchain technology offered by this protocol made important contributions in creating very different perspectives, but at one point it was clogged due to its technical structure and could not adapt enough to real life. Many new projects have emerged to open this congestion, forks, updates, small improvements have been made on issues such as speed, but there has still been no progress to relieve the system. Because at the core of all projects lay the classical or nakamato protocol again, or the server logical central structures.
These days, the Avalanche protocol, which is preparing to move to the mother, is the expected, sought-after blood. It is almost as if the system will overcome congestion with its unique consensus protocol and flexible structure. They’re not unfair, Denali did a great job with participation from 60 countries in the test version and more than 1,000 nodes. They caught Visa in the process completion rate and the number of transactions completed per second.
- BTC 7 transactions
- Eth 15–30 transactions
- Dash 48 transactions
- LTC 56 transactions
- Avalanche > 4500 transactions
(Currently, the last test of the main pre-network, “Everest”, is taking place.)
The avalanche’s potential is that the “share- in-action” (including me) predicts that this protocol will affect and transform the market with its strength and flexible structure. Expectations and interest are intense, and these avalanche communities are also understood from their work on social media and the public sale. Public sales grossed $42 million at a time of four hours, when icos were outdated.
The following characteristics of Avalanche stand out:
- Speed: results in operations in 1–2 seconds
- Scalability: results in thousands of transactions per second with thousands of validators and doesn’t decrease performance.
- Blockchains: users can identify and create global or private chains.
- Finance: supports how to exchange and easily intelligent digital asset formation by determining the desired rules of all kinds of assets.
- Security: the confirmors have a say and are far more immune to the attack than other consensus protocols because they do not have a say and are not leaders.
- Flexibility: the virtual machine model allows developers to create chains and dApps that contain all kinds of arbitrary logic.
The principle of working that separates Avalanche from others as the third main road in consensus protocols;
- Classic: Each node is in contact with each other;
- Nakamato: Peer-to-peer proof, problem solving;
- Avalanche: Nodes communicate randomly as small groups , other groups are observed and encouraged to consecrate.
Avalanche’s protocol is a bit like sample sampling prosödia known to those who have been involved in quality control. Not all of the 5000 materials that come under control are checked individually, the specified figures (2 checks from 0–100, 8 control from 100–1000….) are checked and the amount in the probability account is decided to be firm or rejected. Looking at all 5000 materials is both a huge waste of time and low efficiency. Of course, there is also the possibility of wrongdoing here, and even malicious knots in the Avalanche do not change the right decision. This takes security much further than in btc. Unlike the quality control system, groups with Avalanche are encouraged to consension and consensus is provided in a short time. (See https://files.avalabs.org/papers/consensus.pdf)
After BTC, ETH created a new blockchain with a virtual machine in the application, allowing developers to easily start smart contracts without creating blockchains from scratch. It was a revolution, so the way for smart contracts and defi u.S. However, eth failed to go up from 15–30 transactions per second and forced ETH to create developers’ own consensus algorithm and privacy features. At this point, the Avalanche will turn on the blockage here with its scalability, speed and chain structure. The difference between avalanche’s ETH runs in each dApp’s own chain of independent blocks, and each chain is validated by a subnet with a set of custom authenticators. All these flexible features seem to lead the Avalanche in dApp and DEFI.