Why is the blockchain valuable?
What makes Bitcoin valuable is a hot topic. Some people see it as a new store of value, just like gold or the US dollar. Some think it is valuable because it is a deflationary currency and only 21 million BTC will ever exist. However, I think that the blockchain and the security of a decentralized network are very valuable to society. Here's why!
In a centralized network, all computers on the network are connected to the main server. To prevent hacks, governments and large corporations build layers of security to protect the main server that stores all the data. If that central server is hacked, all computers connected to it will be compromised and important data will be stolen.
In a decentralized and peer-to-peer network like Bitcoin, computers are connected to each other on the network. The responsibility of holding and securing the data is shared by all of the computers in the network. The Bitcoin blockchain is stored on all computers and is transparent. Therefore, hackers don’t want to steal the data. Instead, since the blockchain records the exchange of ownership, they want to manipulate the ownership in their favor.
To maintain its integrity, the blockchain is stored on thousands of computers across its network. Each computer must contain the latest version of the blockchain.
To manipulate a data set, a person needs to find the specific block on the blockchain, change the data set, and each block number thereafter, as well as have more computational power than the rest of the network combined.
If a hacker achieves this, it is called a 51% attack. This has NOT happened on the Bitcoin network.
Therefore, in a decentralized network, the more dispersed the computational power, the more accurate and secure the data is.
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