This sentence may be the biggest lie you have ever heard in the cryptocurrency and blockchain circles.

1. The most deceptive truth in the world is the chicken soup that sounds powerful but is not understood.

I believe everyone who is interested in blockchain has heard this:

“Blockchain technology is good, but cryptocurrency speculation is bad.”

"The purpose of cryptocurrency speculation is to make money. One fish spoils the whole pot of soup."

“Blockchain technology will live forever, but digital currency (or Bitcoin) will die.”

If I remember correctly, these words seem to be said by some traditional financial media, especially the first sentence, which has become a political correctness in the past few years due to its neat parallelism and catchy. With this as a theoretical guide, mainstream financial media have used various negative reports that skirt the line in the past year, causing trouble for countless investors and blockchain researchers. If you want to blame them, they will still jump around and make excuses: "Hey, I am against those empty projects and unreasonable ICOs, but I am not against blockchain. Hey, I don't take the blame for this."

However, if you continue to ask these authors: "Why is blockchain technology good, but digital currency is bad?" Most of them may be vague: "XX newspaper, XX professor said so. Such a respected expert, how can he be wrong?" If you ask them to the bottom of the matter and annoy them, they will start to smooth things over: "Digital currency has its good points, but there are too many speculators with bad intentions among its speculators."

You see, after all this fuss, it turns out that digital currency "also has its good points."

So what is the benefit of “digital currency”? What is its relationship with blockchain?

This is what we are going to talk about next.

2. The goal of blockchain: to create a database that cannot be tampered with

When talking about "digital currency", we have to talk about blockchain.

So, what exactly is "blockchain"? If you search for it, Baidu will tell you that it is a kind of "ledger".

However, from my personal experience, this explanation makes things even more confusing.

We all know that the so-called "account book" is generally used by financial workers.

If you explain blockchain as a “ledger,” some non-financial workers might think, “What does this have to do with me?”

Psychologically, they will feel alienated from "blockchain".

Therefore, if we compare blockchain to a "notebook" or "database", it is actually more appropriate and more appropriate. After all, these two tools are common to all industries and even all professions.

In addition, given that we are now in the information age and a lot of work has to be done on computers, I prefer to interpret blockchain as a "database."

So, what are the obvious differences between the blockchain database and ordinary databases?

In my opinion, the biggest feature of blockchain is that once you write information on it, it can no longer be tampered with.

I know that some readers will ask in confusion at this time: "Hey ~ that's not right, isn't the biggest feature of blockchain decentralization, or distribution? You people in the cryptocurrency circle talk about decentralization every day, why don't you mention it now?"

This statement is not contradictory, because the "immutability" I just mentioned is the ultimate goal of the blockchain system, and "decentralization" or "distribution" is the means to achieve this goal.

3. Distribution is just a means: Decentralization makes information difficult to tamper with

So, how does “decentralization” make the information on the blockchain database “unalterable”?

To understand this problem, we must first understand how blockchain records information.

Let’s take an example.

Now, let's assume that a blockchain database consists of three sub-databases: A, B, and C. (Figure below)

Now, we start entering data into database A. (Figure below)

After entering data into A, the same data will appear in databases B and C. (Figure below)

What have you discovered here?

That’s right, in the big database of blockchain, if you enter data into a sub-database, then other sub-databases will record the data along with you.

It should be pointed out that this input process is automatic, not like the analogy below. You should know that sometimes, making the analogy scene younger may not reduce the difficulty of understanding, but may mislead others to a certain extent.

Figure: The accounting of each node in the blockchain is not such an active action, and this seemingly wrong analogy close to life is actually very misleading to newcomers.

Okay, now we know that in the big database of blockchain, when you enter data into a sub-database, other sub-databases will automatically follow suit and enter the data. This is the way blockchain enters data - distributed.

But what does it have to do with immutability? And how does it achieve this goal?

Okay, now everyone please move aside because I'm going to make another analogy.

Friends who have some knowledge of biology may know that our body produces a large number of new cells every day. The DNA of these cells is the same, but occasionally some "new cells" with gene mutations are produced, also called "abnormal cells". In most cases, these "abnormal cells" have different DNA from other cells. Therefore, as soon as they appear, they will be identified as "aliens" by your body system and eliminated on the spot.

The principle of the blockchain database is similar.

Suppose I now modify database A... (below)

The modification is complete. Do you know what the result will be? (Figure below)

That’s right, the entire blockchain system will react just like the human body. A’s notebook, because its content is different from others’, will be detected by the entire blockchain system and instantly invalidated, just like the human body rejects “abnormal cells”. Then a new notebook identical to B and C will be generated for A (see the picture below). In other words, your changes will be in vain.

This is the general principle of "decentralization" or "distribution", which helps the blockchain database to achieve "immutability". (The actual principle is more complicated, and we will slowly introduce and correct it later)

4. Is it really tamper-proof? Don’t make a fuss, it’s just a little troublesome

But is this really enough? Is blockchain really “immutable”?

Obviously not. Please think about it, what will happen if I tamper with A and B at the same time? (Figure below)

That’s right, now, “C”, which records the original information, has become a minority. (Picture below)

In this way, C is invalidated by the blockchain system, and the information in the three sub-databases is modified. (Figure below)

You read that right. The blockchain that claims to be “untamperable” has now been tampered with.

Blockchain hype, take a step forward, if you are healthy, come out and take a step forward. Are you sure you are not here to make people laugh?

But if we calm down and think about it, why does this problem arise?

From the above process, we can clearly see that the main reason is: the tamperer has control over most of the sub-databases, that is, A and B (by the way, the industry is accustomed to calling sub-databases "accounting nodes"). In this way, I have the ability to modify the entire blockchain database.

If you have played with Bitcoin and heard of the concept of a 51% computing power attack, it is easy to understand, because this is what a 51% computing power attack means.

5. Cryptocurrency: Military Expenditure of Blockchain Defense System

So, how do we prevent those who intend to tamper with the blockchain database from gaining control of the vast majority of sub-databases (accounting nodes)?

The answer is that we need to find ways to make the sub-databases grow faster than they can control.

The most direct method is to reward those who establish sub-databases, or in other words, those who become accounting nodes.

What are the rewards? That’s right, digital currency.

Otherwise, who will work for you if you don’t pay?

Only the incentive effect of digital currency can make the growth rate of accounting nodes have the opportunity to be faster than the speed of node concentration, thereby achieving the "unalterability" of the entire database.

Dear readers, after reading this, do you still think that "blockchain is good and digital currency is bad"?

I believe you all already have the answer in your heart.