Blockchain and Crypto World in 2021
With the development of technology, the world of finance has been the focus of great revolutions, like everything else. The biggest of this great revolution took place in digital currencies called crypto money under the leadership of blockchain. And with the birth of the crypto world, many new terms have entered our lives and lots of people are curious about these terms. In this article examine the answer of some of the questions like What is Mainnet, What is Altcoin and What is Blockchain?
One of these new terms means that Mainnet cryptocurrency transactions are broadcast, verified and recorded on a distributed ledger technology (blockchain). Also, this term is the term used to describe when a blockchain protocol is fully developed and deployed.
Testnet is used by programmers and developers to test all aspects of a blockchain network before making sure the system is secure and ready for mainnet startup. This testnet is used to identify times when the blockchain protocol or network is not yet operating at full capacity, unlike main network networks.
In other words, testnet and mainnet serve two different purposes. Testnet exists only as a working prototype for a blockchain project. Mainnet is a completely developed blockchain platform for users to send and receive cryptocurrency transactions.
Often, an Initial Coin Offerings (ICO), Initial Exchange Offer (IEO), or other means are attempted before a blockchain project's mainnet is launched to help the project raise funds and grow their community. These collected funds are often used to develop prototypes of the blockchain network and are then tested at the testnet stage. After all bug fixes have been made and depending on the performance of the test network, the functional main network version is launched.
2017 was the year many blockchain companies decided to crowdfunding. For this purpose, it decided to carry out ICO crowdfunding activities by issuing its own ERC-20 token in the Ethereum network, and these tokens were then distributed to the investors 'wallets in direct proportion to the investors' contributions.
With the ICO crowdfunding completed, teams have their own local currency instead of the previously issued ERC-20 token. At this point, a process known as a mainnet swap takes place. This process is the process by which ERC-20 tokens are exchanged for the coins of the new blockchain. Upon completion of the mainnet swap, the remaining tokens are usually destroyed and only new tokens remain in circulation.
Although there are many platforms that issue digital tokens such as Stellar, NEM, NEO, TRON and Waves, the most popular of these are Ethereum and ERC-20.
Altcoin is the term often used to describe alternative digital assets such as a non-Bitcoin coin or coin. The reason this nomenclature is used is because Bitcoin is considered the original cryptocurrency and others are only viewed as alternatives.
The term "Altcoin", the most well-known example of ERC-20 tokens, is used in a very broad sense to refer to digital assets, which are technically referred to as "tokens" instead of coins.
Since Bitcoin's creation in 2008, more than 2,000 alternative cryptocurrencies have been uncovered by different individuals or institutions. Most of these altcoins originated as modified copies of Bitcoin by a copying method known as the Hard Fork. Although these coins have similarities, each altcoin has a specific function.
Altcoins forked from Bitcoin involve a mining process based on many consensus algorithms. Examples of these are Proof of Work, Proof of Stake, Delegated Proof of Stake, Proof of Burn, Proof of Authority and Delayed Proof of Work consensus algorithms. Each of these algorithms has its own characteristics and the most appropriate one should be determined and used according to the needs.
Some users should not confuse the terms "altcoin" and "shitcoin", and the term "altcoin" should not be perceived as a derogatory or disparaging term.
Blockchain technology is an ever-growing chain of data logs thanks to anonymous participants. The data sets in this chain are ordered chronologically and are secured because they are linked to encrypted evidence.
The first examples of blockchain date back to 1990. Computer scientist Stuart Haber and physicist W. Scott Stornetta have implemented cryptographic techniques in the blockchain to protect against modification of data in digital documents. These studies later became a source of inspiration for many different computer scientists. Thanks to the innovative approaches brought by the prototype work in 1990, Bitcoin emerged as the first decentralized digital payment method, the first crypto currency. In 2008, the Bitcoin technical report was published under the pseudonym Satoshi Nakamoto.
Blockchain technology is much older than Bitcoin. Blockchain technology, which forms the basis of cryptocurrencies, keeps permanent records of all pre-approved transactions and acts as a public digital registry because it is decentralized.
All transactions on the blockchain are located in a peer-to-peer network of globally distributed computers called nodes. These nodes contain copies of the blockchain. In this way, the operation and security of the network increases. This system is on the basis of the fact that Bitcoin technology is also decentralized, not within any government border, and does not require a third party.
The Bitcoin blockchain cannot be changed because it is distributed ledger technology (DLT). This makes Bitcoin resistant to various changes and fraud. It also requires a huge amount of computing power and electricity to acquire new bitcoins. Other than that, the network does not in any way apply the concept of "original" digital documents. In this way, Bitcoin is a digital currency that cannot be copied.
Thanks to the Proof of Work consensus algorithm, Bitco can be built as a Byzantine fault tolerance (BFT) system. This means that even if some participants display dishonest behavior, the blockchain continues to operate as a distributed network. For this reason, the Proof of Work algorithm is very important in Bitcoin mining.
Although blockchain technology and cryptocurrencies arising from this technology are used in decentralized systems, they can also be integrated into central systems such as health, insurance and IoT. In this way, operating costs can be reduced significantly by ensuring data integrity.