IS: Blockchain

Blockchain

sometimes referred to as distributed ledger technology
(DLT), makes the history of any digital asset unalterable and transparent
through the use of a decentralized network and cryptographic hashing

Distributed Ledger

There is 1 ledger, all nodes have some level of access to that ledger. All Nodes agree to a protocol that determines the true state of the ledger at any point in time. The application of this protocol is sometimes called achieving consensus.

Hash

mathematical formula that serves as a unique fingerprint for any
given piece of data, a shortened version of the file. A hash will
always output the same value when given specific data; this means that if we change even one character in our original document, the hash will not match. A hash value is usually produced by
applying a hashing function to an input value, such as SHA-256, MD5

Mining

The process in which computers compete to create new blocks

Proof of Work

nodes in a blockchain directly compete to see which one can solve a
complex mathematical equation first. The first one to do so gets the “proof” of their “work” and is rewarded by earning the right to mine the next block of a transaction. The miner is then rewarded for
processing the block

Proof of Stake

nodes are selected via a computer algorithm that employs a certain
degree of randomness. Nodes that hold more of the network’s currency are more likely to get chosen, which rewards prolonged participation — their “stake” — in the network over raw computing power. Those selected to process a block are known as validators instead of miners

Use PoW when:

Security and decentralization are top priorities, Energy cost is acceptable.

Use Pos when

We want efficiency and lower environmental impact, we still need strong security through economic incentives