Beginners Guide to Real Life Applications of Blockchain

Could this have been done in another, more secure, faster, and cheaper way?

This is where blockchain and cryptocurrencies come in. Cryptocurrencies and their transactions are one of the most well-known use cases for the blockchain, which makes international banking a lot faster and cheaper.

Equifax, one of the nation’s three main credit reporting agencies (the other two are Experian and TransUnion), announced on September 7, 2017 that they had a ‘cybersecurity incident’ that potentially impacted approximately 143 million U.S. consumers.

In other words, they were hacked.

“As we see more and more issues with the centralization of data, we see the need to implement different schemes for different uses—biometrics for in-person interactions and transactions, and some form of advanced encryption or blockchain technologies for online activities.

The solutions are already in front of our eyes.”

Examples of Estonia’s e-solutions include the famous e-residency program that allows foreigners to have a digital identity in Estonia, allowing them to access its solutions, and even open a business in Estonia without any problems.

Even though there have been over 700 million new bank accounts opened from 2011-2014, there are still over 2 billion people unbanked, meaning they don’t have access to any kind of financial institution.

Having no bank account makes having financial stability much more difficult. This is how we change it.

Ethereum is a blockchain-based, open-source, smart contract platform, meaning that while the early cryptocurrencies, like Bitcoin, acted only as a store of value that could be transacted with, Ethereum allows users to create smart contracts, issue their own tokens, and run decentralized apps (DApps), making it possible to do a lot more things on the blockchain than before.

Gas is the transaction fee which is paid to the miners in exchange for their computing power that keeps the network running and allows users to make transactions.

Gas price is the value of one unit of gas. So, if anyone can change the gas price, why would someone want to increase it, when they can just keep it low?

When someone makes a transaction on the Ethereum blockchain (it is similar in almost all blockchains), the transaction is first checked to confirm that the account actually has enough funds to make such a transaction.

When miners set up their mining operations they create a set of rules for it.

They can define the minimum gas price of transactions that they’ll add to their blocks.

Setting a threshold for the gas price allows miners to only concentrate on profitable transactions, maximizing their profits.

This quickly illustrates how gas is calculated and spent.

All of the unmined/pending transactions are in a pool, waiting for their time to be added to blocks.

During normal times everything works just fine, and the amount of new transactions being broadcast to the pool is around the same as the number of transactions getting mined and added into blocks.

But during hectic periods, like ICOs, or when someone creates an app that uses a lot of micro-transactions, like CryptoKitties, then the network can clog up quite fast.

One of the most popular use cases for Ethereum is issuing your own token and launching an ICO.

Tokens created on Ethereum are called ERC20 tokens.

These tokens, as well as their ICOs, are based on Ethereum’s smart contracts.

Gas is the transaction fee that is paid to the miners in exchange for their computing power, which keeps the network running, processes data, runs code, and validates transactions.

SegWit is an optimization proposed by Pieter Wuille, a Bitcoin Core developer.

This optimization increases the amount of transactions that fit into blocks without changing the block size.

Currently, the block size of Bitcoin is limited to 1MB.

This size was fine in the beginning, where only a handful of people used BTC to make transactions.

Now that the popularity of Bitcoin has grown exponentially, this block size is not enough.

A compromise was made in the 23rd of May, 2017 and it is known as the New York Agreement.

This compromise was to implement the SegWit soft-fork as well as increase the block size limit from 1MB to 2MB.

This is called SegWit2x and this agreement was signed by the 58 companies that control around 83% of the hashing power.

During this course, you have found out how blockchain is becoming instrumental in the daily digital lives of governments, companies, and ultimately, people - adding a host of benefits to all users, mainly in the forms of security and immutability.