Introduction to Blockchain

Blockchain

Blockchain is a technology that stores and manages data across a network of computers. This technology consists of multiple blocks, each containing transactional data and permanently linked to preceding blocks. Due to its use of robust cryptography, blockchain offers exceptionally high security, minimizing the potential for systemic fraud. Blockchain serves as the foundation for cryptocurrencies such as Bitcoin (BTC) and Ether (ETH), with applications spanning financial transfers, supply chain management, insurance, and beyond.

Ethereum

One such blockchain, Ethereum, is primarily used to develop software and organizations, manage digital assets, execute transactions, and enable communications without central authority control. Using Ethereum requires no disclosure of personal information; users retain full control over their data and shared content. Ethereum operates with its native cryptocurrency, Ether, used to pay for specific network activities. Ethereum is fundamentally a smart contract application development platform operating on blockchain technology. Its core purpose is executing smart contracts, digital tokens, and blockchain-based executable programs.

Decentralized Autonomous Organization (DAO)

A Decentralized Autonomous Organization (DAO) is a blockchain-based organization governed by coded rules and member consensus. Its members execute strategic, administrative, and financial decisions through voting mechanisms, eliminating the need for central intermediaries or managers. Smart contracts on the blockchain enable automated operations based on collective voting outcomes. In essence, DAOs facilitate intermediary-free social governance, where decisions are made directly by the community members. This not only enhances transparency but also enables broader participation, leveraging diverse societal segments for inclusive decision-making.

Tokens

On Ethereum, tokens can serve diverse functions and utilities. Below are explanations of several common Ethereum token use cases:

1. Currency Tokens: Many Ethereum tokens function as currencies. For example, Ether tokens serve as the primary currency for executing transactions and payments on the Ethereum network.
2. Equity Tokens: Certain tokens represent equity shares in projects or companies. Holders are entitled to profits and decision-making rights regarding the project.
3. Utility Tokens: These tokens provide access to specific services or products within a platform or application. They typically facilitate payment for service fees or exclusive feature access.
4. Security Tokens: Security tokens typically function as investment instruments in tradable assets (e.g., real estate, stocks). Regulated by financial authorities, their value correlates with underlying assets.
5. Non-Fungible Tokens (NFTs): NFTs represent unique digital assets and are commonly used for digital art, video games, and blockchain-based collectibles.
6. Voting Tokens: These tokens enable participation in collective governance voting. Holders use them to influence project upgrades and policy changes.

It must be noted that each project may deploy tokens as various instruments, and applications can vary significantly.

IPFS

IPFS functions as an advanced file system enabling distributed storage and sharing of files across the global internet network. Essentially, it ensures that the files remain permanently accessible. In contrast, blockchain is a transaction-recording technology using encrypted blocks. Data stored on blockchain is immutable and highly secure, primarily serving cryptocurrency transactions (e.g., Bitcoin, Ether). Fundamentally, IPFS operates as a vast computer network functioning collaboratively. When adding a file to IPFS, the file fragments into smaller components and the fragments are stored across multiple computers worldwide. Thus, any network participant can store a portion of your file. Once uploaded, files become publicly accessible—resembling a public library where all users benefit. Consequently, IPFS represents a novel approach to internet file storage/sharing, eliminating centralized architecture while enabling streamlined data access.