What is blockchain?

How do you verify the authenticity and owner history of an art piece in a transparent and trustless manner? The answer is blockchain. In this article, we cover the basics of one of the most fundamental concepts in crypto.

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@enter.artPUBLISHED 17TH NOVEMBER 2021

Let’s say you’re an artist. Wouldn’t it be great if you could automatically get royalties every time someone bought or resold an art piece you made? 


Or perhaps you’re an art collector. How do you verify the authenticity and owner history of the art piece in a transparent and trustless manner?

There is a technology that solves these issues. It’s called blockchain

It’s the tech behind cryptocurrencies like Bitcoin and Ethereum. But it goes further than that. Blockchain is almost unlimited when it comes to different applications that are disrupting industries around the world. It’s especially useful for cutting out the middlemen and connecting creators directly with their audiences.

Even if you’ve heard about blockchain from friends or the media, you still might not have a good idea of what it actually is. Let’s take a closer look.

Fundamentals of blockchain

On the most basic level, a blockchain stores information. It’s a decentralized digital record that gets distributed throughout a network to prevent the data from being altered or corrupted. 

At its core, a blockchain is meant to provide a secure data storage and verification solution without the need for a centralized authority.

You can store almost any kind of information on a blockchain. While it’s often used to track cryptocurrency transactions, it can also record digital ownership of assets like art, music, or gaming collectibles.

How does it work?

Suppose you want to buy an NFT or send some cryptocurrency to a friend. In that case, those transactions need to be validated before adding them to the permanent blockchain record. But since there’s no governing authority to verify the authenticity of your transaction, how does it get approved?

Here’s a simplified explanation of how blockchain technology works. 

  1. You initiate a transaction (i.e., an NFT purchase).
  2. The transaction data is distributed to a network of computer validators. 
  3. This network uses complex algorithms to reach a majority consensus regarding the transaction’s authenticity.
  4. Multiple verified transactions are grouped into a block. 
  5. This block is added to the blockchain comprised of other validated blocks. Your transaction data is now in the permanent record. 

To incentivize users to maintain the blockchain and keep it operational, validators receive transaction fees or block rewards depending on the network protocol. 

What are some benefits of blockchain?

Blockchain is a far-reaching technology that has many advantages besides the ones listed here. These are some of its most important benefits:

  • Transparency. The blockchain is public, ensuring that everyone has access to the same information. This promotes trust in the network.
  • Privacy. Even though transactions are public, your private, personal data is protected. 
  • Decentralized. No institution, such as a bank or a government, controls a blockchain network of many independent actors.
  • Immutability. Blockchain records can’t be altered, which limits human error.
  • Efficiency. Blockchain doesn’t have business hours. Transactions can be made 24/7 without intermediaries.

What are some disadvantages of blockchain?

No technology is perfect. Blockchain still faces some challenges, such as:

  • Energy use. Maintaining proof of work (PoW) blockchain networks and generating new assets can consume a lot of energy. However, newer protocols like proof of stake (PoS) use far less energy than PoW blockchains. The enter ecosystem is built on the Binance Smart Chain, a proof of stake blockchain that enables fast, secure transactions. Best of all, it uses a fraction of the energy required by PoW blockchains such as Bitcoin.
  • Scalability. There’s still some way to go before most blockchain networks break through the rate of transactions needed to truly reach a massive scale.
  • Personal responsibility. Since no centralized authority can reverse errors on the blockchain, users need to be careful to protect their private keys and blockchain-based assets from loss or theft.

Future of blockchain technology 

We’re still at the beginning of the blockchain revolution. New use cases are being developed every day, and it’s possible that every industry in the future will integrate blockchain technology in some way.

Blockchain-based NFTs have exploded in popularity and offer digital artists more ways to expand their communities than ever. They allow creators to take credit for their hard work and establish real value for their creations. They protect owners by establishing tamper-proof records and facilitate easy sales and trades. It’s a whole new world for creators and collectors alike.

With so many exciting developments in the blockchain space ahead, who knows what inspiring use cases are just around the corner?



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