Most blockchain projects are based on three major principles: decentralization, scalability, and security. The beautiful balance between these principles is the natural beauty of blockchain technology, but what are these concepts? Let’s explore them in detail and see why artificial intelligence crypto trading robot will make you a profit.
Decentralization
Decentralization means there is no central point of control in this blockchain mechanism. So, who is the decision maker in this case? It is the real quest for many of you. Decisions are made after making a consensus or voting on a distributive network of computers. As you know, blockchain is the mechanism that links millions of computers together. Then, after each registered member’s vote, the decision on anything will be made. This decentralized system helps eliminate the monopoly factor of a few or one-participant systems. This is one of the main reasons for the popularity of blockchain mechanisms.Â
Scalability
The other core principle of the blockchain mechanism is scalability. Scalability is the ability of a system to grow and perform as many transactions as possible. Scalability is necessary for the growth and development of any system. The effectiveness and growth of the system help in attracting more people. Blockchain is highly scalable.Â
Security
Security is the primary concern of every investor and trader. Blockchain has a protected and safe mechanism that can help eliminate hacker attacks and bypass safety protocols. Blockchain mechanisms give users a safe, protected place to do transactions.
Two main currencies are involved in blockchain mechanisms. These currencies are Bitcoins and Ethereum. So, let’s explore these together.Â
Bitcoin Blockchain Basis
Blockchain is a public network, and it is a decentralized place for payment and transactions. This mechanism helps the users and the investors to send and receive the amount in the form of Bitcoin rather than money. This mechanism does not need any bank or financial institution, but the transaction can be made with the help of Bitcoin tokens and the Bitcoin network. All the transactions can be done with the help of the Bitcoin blockchain. These transactions can be recorded in a digital ledger. Sending money through a P2P payment system is much faster, more secure, and cheaper than a traditional one. No one or any third party can control the system.Â
Ethereum Blockchain BasisÂ
The Ethereum blockchain was a star blockchain. It was started and developed in 2013. This network is a public, decentralized, and P2P network. It also allows users to send and transfer money like Bitcoin, but this system is mainly based on decentralized application Dapps. The Ethereum blockchain was developed after finding the limitations of the Bitcoin blockchain. Using decentralized applications and intelligent contracts makes this network more functional, interactive, operative, and seamless. The automatic execution without any intermediary is the natural beauty of this system.
Difference Between Bitcoin and Ethereum Blockchain Basis
Bitcoin and Ethereum are decentralized P2P networks and work based on their token. Both systems rely on cryptography. The only difference between them is these system’s purpose and capability. Bitcoin is the system that stores in the form of value. The blockchain holds all the transactions and tracks the ownership of the Bitcoins. In the case of Ethereum, it allows only the smart contacts for the user of the Dapps to make the function. This system is more sophisticated than the blockchain mechanism.