---
# System prepended metadata

title: Blockchain - the framework for building the crypto universe
tags: [EN-TheSmith's-Collection]

---

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Author: https://twitter.com/guiribabrb
Original Article: https://odysee.com/@ShapeShiftDAObr:a/blockchain-ptbr:a
---

# Blockchain - the framework for building the crypto universe

What makes the blockchain different from other types of DLTs is the compilation of data into nested blocks of information. The blocks that store network data are interconnected by so-called hashs - unique identifications associated with each of the blocks. Each block, in its header, brings a copy of the hash of the previous block, interconnecting them as a chain and, in the end, generating a unique hash, resulting in an equally unique identification. The cryptographic technique used is called SHA-256.

![](https://hackmd.io/_uploads/SJbD2zoiK.png)


The use of hashing as a criterion for sequencing blocks is a way to guarantee the inalterability of the data included: the slightest change in content will completely alter the block’s hash.

The phrase “Hello world” is equivalent to the hash of “**b185474661036db0bc54779b19a01c12115b4a75629e8cb53ab844da7132c31f”**. However, when the exclamation mark is included in the sentence - Hello world! - and encrypting is using SHA-256 we arrive at the hash: “**2c924923fb8d9fdaad6d54b968a1b4a482249795e3ff37e2aad20a**”*

*[If you want to take the test.](https://md5decrypt.net/en/Sha256/)*

Thus, the concatenated sequence of blocks can be represented by the image below:


![](https://hackmd.io/_uploads/HkSY3GjsY.png)

Source: : [Blockchains, tokens e criptomoedas — analise jurídica](https://www.almedina.com.br/produto/blockchain-tokens-e-criptomoedas-9263)

Because each block contains new information to be introduced in the storage of all nodes, it’s necessary to formulate a consensus. This means that everyone must agree on the veracity of the data included in the distributed database. If the same activity were performed manually - without the use of the blockchain -, it would be the equivalent of several people analyzing the transactions and guaranteeing their suitability. However, with the use of technology, this consensus is formed from specific mechanisms defined by the developers.

In the case of Bitcoin, the mechanism chosen by Satoshi Nakamoto was the Proof of Work. PoW, as it’s commonly called, was introduced into the Bitcoin blockchain. In this, the code implements a mechanism, where the nodes need to solve a cryptographic puzzle using their computational power to introduce new information, as well as guarantee its veracity.

The obligation directed to the nodes is necessary to be able to avoid network attacks: since any modification and validation of blockchain data demands expense by the node, it’ll be more difficult for a malicious user to introduce false information in the distributed storage database.

To encourage the continuity of node activities on the Bitcoin blockchain, rewards for reputable nodes were implemented. Thus, there is a dispute between the miners - the name given to those responsible for storing and validating the blocks - in the solution of the cryptographic puzzle. The winner, earns the rewards for performing his activity, pays in bitcoins.

*Important to note: miners not only earn bitcoins for performing their activities as network nodes, but are also rewarded with fees for processing transactions that occur on the blockchain.*

The consensus formed from Proof of Work is just one of the types that can be used in a blockchain. With the discussions about the impacts of energy use in block mining, several other ways of consensual formulation emerged in projects. All have advantages and disadvantages compared to PoW, but one is worth noting: [the Proof of Stake, to be adopted in 2022 by Ethereum.](https://ethereum.org/en/developers/docs/consensus-mechanisms/pow/)

In addition to the differentiation when forming the consensus, it must also be verified whether the blockchain is public or private. After the launch of the Bitcoin blockchain, little by little others based on its source code emerged, but adapted to specific needs. Despite the genius of Satoshi Nakamoto’s development, the network he built has unique characteristics: public, immutable and decentralized. However, for certain sectors that saw advantages in their use, they may not be suitable, either because of the lack of control in the nodes that are part of the network or because of the publicity of all the transactions that took place.

For this reason, private blockchains, DLTs built by companies interested in meeting the demand of sectors interested in the technology, emerged.

As explained in the article on Distributed Ledger Technologies, many of them waive innovations brought to the blockchain in order to achieve specific goals, such as centralization in the choice of nodes, the possibility of changing the information contained in blocks, etc. This choice can put at risk all the data present on the network, unless security measures are created to protect it from attacks or failures inherent to centralized systems. But banks, governments and transportation companies have increasingly turned to companies like Ripple, R3 and Hyperledger Fabric that develop private blockchains.

And you, do you know of other blockchains that weren’t brought here? Do you see the use of other ways of consensus more efficient than the one used in Bitcoin? 

Comment below and tell us!

###### tags: `EN-TheSmith's-Collection`
