
👾 Game Master
6/21/2022, 2:39:04 PM
Blockchain
Important Things to Know Before Reading
What is Decentralization in General?
The term decentralization simply means "without a centralized authority". It can be applied in many different areas, such as politics, science, laws, etc. Here we are focusing on finance.
What is a Decentralized Market?
Most of the applications of decentralization are built on the foundation of a decentralized market. In most cases, the decentralized market utilizes technology to help the investors could reach each other directly, without the need for a centralized institution to make the trade happen.
De-Fi
Decentralized finance (De-Fi), is a system in which financial products (such as stocks, bonds, etc) are available to trade on the decentralized blockchain. Instead of having a central government or financial intermediary facilitating the transactions, by applying De-Fi, different parties can trade directly with one another.
Background Information
Ever since 2018, the concepts of Bitcoin, Ethereum, and many other cryptocurrencies blossomed. Objectively speaking, cryptocurrency is only a "niche" application of the blockchain. Blockchain is a quickly evolving area and it seemed to be the most important technology that resulted from the cryptocurrency boom. There are other emerging industries that we saw in the past years, including NFT, Metaverse, and games built on the Blockchain. The new technologies and functions of blockchain turned itself into an essential tool in various aspects.

Image source: https://builtin.com/sites/www.builtin.com/files/styles/og/public/blockchain-applications.png
What is a Blockchain?
As its name indicates, a blockchain is simply a database, demonstrated in the form of blocks, and the blocks are linked to the main chain.
Despite the fact that most often when we heard about blockchain, it is accompanied by cryptocurrency, it has many other uses. Some of the applications are storing transaction history, legal contracts, product inventories, etc.
As the Blockchain technology evolved, more fascinating features under it had been discovered. Many giant companies, including Walmart and Amazon, started to apply Blockchain technology in their supply chain supervision because this is a much more efficient and cost-effective tool compared to the traditional systems.

Image source: https://research-assets.cbinsights.com/2017/11/20155651/112017-Blockchain-4-V2.png
Why Blockchain?
In general, blockchain creates a transparent and secure ecosystem. All transactions are available for every user in the system to see.
Here are some strengths of blockchain compared with other types of databases:
- Transparent
- Secure
- Direct
The flowchart for how exactly a blockchain works is demonstrated by the graph below:
