The Internet has brought all of the world's industries online over the past 30 years. All content on the Internet can be readily duplicated, therefore created a world where creators have a hard time making money. However, it made distributors of that content who distribute the duplicates far easier to make money. The first killer application on the Internet was email. Blockchain can be described as Internet 2.0 because it is an Internet that cannot be duplicated.
Blockchain is Internet 2.0
Blockchain's killer application is cryptocurrency. Bitcoin is just a digital file, but it has never been hacked or duplicated over the past ten years. If you dig into the bitcoin-related hacking cases, they were all stolen from central exchanges or personal wallets, and the mainnet has never been once compromised. This is why blockchain is expected to create a world where content distributors will have a hard time making money, while the content creators will have a much easier time. What a change this will bring!
Bitcoin, invented in 2008 as the progenitor of all cryptocurrencies and its network started in 2009, has exploded in the last ten years. There are 6,000 cryptocurrencies that imitate or improve upon bitcoin, exceeding $400 billion in market capitalization. If you consider gold is valuable because of its analog scarcity due to the limitation of mining. The cryptocurrency can also have value due to digital scarcity due to mining limitations using software algorithms. It is challenging to buy, sell, or move large amounts of gold. Since cryptocurrency is easier and faster to do the same, cryptocurrency will likely surpass gold's current market capitalization of $10 trillion in the not too distant future.
Analog vs. Digital Scarcity
Blockchain, the underlying technology of Bitcoin, is humanity's first technology with a structure that cannot be duplicated or forged. Bitcoin's security technology's core is to collect the transaction records for the first 10 minutes and obtain a hash value to form the first block. The hash function is a function that maps data of arbitrary length to data of fixed length. The second 10 minutes' transactions are collected, and the first hash value is added to it to obtain the second hash value, forming a second block and simultaneously connecting it in a serial chain. It's collecting the transactions for the third 10 minutes, adding the second hash value to it to obtain the third hash value, and repeating this process N times to form the sequential chain with the subsequent current hash value, thus obtaining the name blockchain.
What is Blockchain?
There is a server in the center in the current Internet, so it is a structure that only scales servers and focuses on increasing their security, but is always at risk of internal forgery or external hacking. Therefore, the blockchain has a system to fundamentally block internal forgery or external hacking by removing the server at the center and storing transaction records to all network nodes. If someone manipulates the fifth block's transaction record, the fifth hash value will be changed, so all hash values from the sixth upward will be hence changed. Blockchain's all network nodes, according to the protocol, are automatically compared at every instance, and if there is a difference from the transaction record that more than 51% agree on, it will be automatically discarded, making it impossible to forgery. Because of this immutability and its artificial digital scarcity, the current price of Bitcoin is over $10,000.
What is Decentralization?