What is blockchain and how does decentralization work?

What is blockchain and how does decentralization work?

Blockchain is a distributed ledger technology that allows data to be stored across a network of computers. Decentralization means that no single entity has control over the entire network, enhancing security and transparency.

Can you explain how decentralization improves security?

Decentralization improves security by eliminating single points of failure. If one node is compromised, the others remain unaffected, making it harder for attackers to manipulate the system.

What are some real-world applications of blockchain?

Real-world applications include cryptocurrencies like Bitcoin, supply chain management, voting systems, and digital identity verification.

Are there any downsides to using blockchain technology?

Yes, some downsides include scalability issues, high energy consumption for certain consensus mechanisms, and regulatory challenges.

How does blockchain impact traditional financial systems?

Blockchain can disrupt traditional financial systems by enabling faster, cheaper transactions and reducing the need for intermediaries like banks.