Learn about Blockchain

A blockchain for NFTs is a distributed digital ledger that securely records ownership and authenticity of unique digital assets. MemoryBank's compatibility with Polygon allows for faster and more cost-efficient NFT transactions, combining the benefits of both platforms to enhance user experience and ensure blockchain security.

Blockchain stands apart from traditional databases due to its decentralized design, where multiple computers work together, ensuring no single authority controls the data. The data in blockchain is organized into blocks, linked together securely using cryptographic techniques, making it highly resistant to changes or tampering. In contrast, traditional databases are centralized, managed by a single entity, and are more vulnerable to potential manipulations or unauthorized alterations.

Decentralization

Blockchain is like a team of computers working together, while traditional databases are controlled by just one company or person. In a blockchain, everyone in the team has a copy of the data, so no one can change it without others noticing. This teamwork makes it harder for someone to cheat or make false changes.

Immutable Records

Imagine the data in a blockchain as a series of linked blocks. Once we put information in a block, it's like writing it in permanent ink. It cannot be easily erased or changed. In contrast, traditional databases might allow some people to edit or delete data, which can be a problem if someone makes a mistake or intentionally alters important information.

Transparency and Trust

In a blockchain, all the team members can see and verify the information. This transparency builds trust among them because they don't need to rely on just one person or company to tell them what's true. On the other hand, traditional databases might require trusting the central authority that manages the data.

Security and Protection

Since a blockchain has many computers in the team, it's much harder for hackers to attack and take control of all of them. The interconnected blocks and strong encryption make it a secure way to store data. In comparison, traditional databases might be vulnerable to cyberattacks if the central authority's security is compromised.

In summary, blockchain offers a decentralized, secure, and transparent way to store data that ensures integrity and trust among its users, which sets it apart from traditional databases that are more centralized and might lack the same level of security and trustworthiness.

There are different types of blockchains, and each has varying gas fees and scalability.

Layer 1 blockchains

Layer 2 blockchains are like extra layers built on top of the main foundation, which helps in making things faster and cheaper. They take some of the work away from Layer 1, like processing smaller transactions, to improve overall efficiency and scalability. One common Layer 2 solution is the Lightning Network for Bitcoin.

Layer 2 blockchains

Layer 2 blockchains are like extra layers built on top of the main foundation, which helps in making things faster and cheaper. They take some of the work away from Layer 1, like processing smaller transactions, to improve overall efficiency and scalability. One common Layer 2 solution is the Lightning Network for Bitcoin.

Sidechains

Sidechains are separate chains that connect to the main blockchain, allowing users to do specific tasks or experiments without affecting the main chain. It's like having a playground next to a big park, where you can try new things and play games, but it doesn't change the rules of the main park.

As we mentioned earlier, blockchain transactions need to be validated by nodes on the network. Consensus mechanisms are how the transactions are validated— they’re how all the nodes agree that a transaction should be permanently recorded (hence “consensus”). There are two main types of consensus mechanisms, Proof of Stake and Proof of Work.

The Proof-of-Stake method

Proof-of-Stake is a method used by some blockchains to verify and validate transactions. Instead of relying on powerful computers to solve complex puzzles like in Proof-of-Work (PoW), PoS works by participants “staking” their own cryptocurrency. The more cryptocurrency someone holds, the more likely they are chosen to validate transactions, encouraging them to act honestly and securely on the network.

The Proof-of-Work method

Proof-of-Work is a way for computers in a blockchain network to compete in solving puzzles. Imagine it like a race where the computer that solves the puzzle first gets to add a new block to the chain and receives a reward, like a digital prize. This method ensures that only the fastest and most dedicated computers can add new blocks, making the blockchain secure and trustworthy.

With Proof-of-Work, not only do several miners need to agree on a transaction’s validity, but the barrier to entry for a bad actor is extremely high due to the computational work and energy required to validate a transaction. For example, there are only a set number of Bitcoin in existence. Therefore, in order to mine each subsequent coin, a more complex problem needs to be solved. This also makes transactions more expensive.

Both of these methods are complex, time-consuming, and ultimately ensure the security of the blockchain, which is why the gas fees are awarded to the operators.

In web3, the term “gas fee” refers to the payment needed to execute transactions on the blockchain. These payments compensate the node operators who keep the blockchain functioning. This validation helps ensure the blockchain has a permanent, immutable record. Each blockchain compatible with OpenSea (Ethereum, Polygon, Arbitrum, Optimism, and Klaytn) has different gas fees. These fees differ depending on how each chain validates transactions.

Four popular use cases for blockchains include: transferring money, purchasing items, storing items, and tracking items as they progress from point A to point B.

Cryptocurrency

Cryptocurrency is a virtual currency that exists on a blockchain. For example, Ether (ETH) is used on the Ethereum blockchain. Cryptocurrency serves as an umbrella term for all digital currencies, which can be accessed by your crypto wallet. Your wallet is a program that helps you buy, sell, and access your cryptocurrency and (in many cases) your NFTs.

DeFi

Decentralized Finance, often shortened to simply “DeFi,” is the term used to describe financial services and exchanges that operate on blockchain technology. Common services include earning interest, borrowing, lending, and trading. DeFi enables trustless, permissionless, and fast transactions.

Smart contracts

Smart contracts are automated computer programs that enforce their coded rules. Using “if this, then that” logic, smart contracts power NFTs and dApps. Buying and selling NFTs using OpenSea is powered by smart contract protocol, Seaport.

NFTs

Non-fungible tokens (NFTs) are unique, digital items with blockchain-managed ownership. They’re bought and sold with cryptocurrency. Examples of NFTs include digital art, collectibles, virtual reality items, crypto domain names, ownership records for physical items, and more.

Supply chain

Supply chain data stored on the blockchain helps companies keep track of items ranging from food items to pharmaceuticals. Organizations use blockchain technology for their supply chains in order to do things like find counterfeit drugs or track contaminated food for recalls. IBM Food Trust, for instance, has focused on using blockchain for supply chain support."

Blockchain's future potential is vast and could revolutionize various industries. It may streamline supply chain management by providing transparent and traceable records of products from origin to consumers. Additionally, blockchain could enhance voting systems, ensuring secure and tamper-proof elections, and facilitate seamless cross-border transactions by eliminating the need for intermediaries, reducing fees, and increasing transaction speed. Lastly, it has the potential to empower individuals by giving them more control over their digital identities, providing secure and privacy-preserving access to personal information.