Recently, Bitcoin & Ethereum has been dicussed a lot. As the foundation of these two applications, many people start to imagine the potential and possibility blockchain might bring to our world.

Well.. blockchain indeed holds the potential to improve the service and process in many industries, but it is not a universal solution to all kinds of scenarios.

My master thesis is about how to help the entrepreneur to design a sustainable blockchain-based ecosystem. In order to testify the methodolgy I've proposed, I've built a DApp (Decentralized Application) based on the guildeline from my research, hoping the result of the DApp turns out to be positive so that my propositions can be testified.

In the process of the research and implementation, I've encounter many issues due to my misunderstanding of the core concept and meaning of the blockchain, which leads to a waste of this amzing technology. To fully utilize the benefits of blockchain, we must understand the purpose and characteristics of it, or we might merely treat this new technology as another kinds of computing infrastructure.
***

## What is centralized network, decentralized network and distributed network?
### Centralized network:
There exists a single node that will satisfy all the request of the clients in the network, and all
the clients have no power over network but only the center node. Centralized means that there
will be only one center node that can make decision and process transactions.
### Decentralized network:
Each node has the certain portion of power to influence the network, but there is no single
node that has control over the all processing. The power is distributed among various parties.
Decentralized means that there is no single point where the decision is made. Every node makes
a decision for its own behavior and the resulting system behavior is the aggregate response.

### Distributed network:
Transaction processing happens in not just one place, but all the nodes (full node) that connect
to the network will be update their own ledger. Distributed means that the processing is shared
across multiple nodes, but the decisions may still be centralized and use complete system
knowledge.
## What is blockchain?

    Blockchain is a distributed and decentrazlied database that can store immutable transactions.

In detail, blockchain is a chain of blocks. Each block can store multiple immutable transactions, and each transaction is being established by the mining nodes of the network. Each mining node must solve a mathematical problem, and the fastest one will have the chance to append the transaction to the blockchain. The effort of each miner is verified by the decentralized nodes within the network, and each decentralized node holds and maintains a copy of the whole blockchain on their own. This process implies the following characteristics of blockchain:

### Decentralized
Blockchain decentralizes the way we store data and manage information, potentially leading to a reduced role for one of the most important regulatory actors in our society: the middleman.
### Distributed
The distributed characteristic means that there is no single hardware infrastructure storing and running the service. Often, this means that a copy of a database exists on several computers inside the network. In the scenario of blockchain, it means that a copy of the ledger exists on all full-nodes within the network.
### Immutability
It means that data cannot be altered in blockchain. However, in practice, this means that data cannot be updated without leaving a trace, which indicates that each transaction is recorded.
### Transparent
All nodes owns a copy of the whole ledger, so it means each node which get synchronized with blockchain owns the access to all the info on this ledger. Moreover, we can use some third-party applications like Etherscan or Bitcoin block explorer to view all the information of ledger without getting connected to the chain.


## Blockchain is a distributed database, but how does it differ from traditional databases?
I’ll explain the difference between blockchain & traditional DB with the following perspectives:
### Security
Traditional DB relies on a single center node to maintain the whole database. Every client node can send an read/write request to the administration node, and the DB administrator will update the corresponding data for them. However, if the security of the center node is compromised, the data of the client can be altered or even deleted.
Blockchain consists of several decentralized nodes that can participate in the process of transaction validation and data storage. Through the process of consensus, each node will verify if they all agree upon the transaction to be appended on the blockchain. Even if a node is compromised, there are still other nodes that can validate the transaction through the process to consensus. Unless the malicious node holds over 50% processing power of the whole network, or the security of the network can be hardly tampered.

### Transparency
In the traditional DB, each client provides their own credential to gain access to their own private files, and other users can’t access these private files unless they also got the credentials of owners or the owners permit. In blockchain, every transaction is accessible to every node, or even everyone due to the existence of etherscan etc. Unless the owner encrypts the data before submitting to the blockchain, other nodes or users will always have the read access to the data.

### Accessibility
Traditional DB usually provides CRUD access to the users, which allows them to READ, WRITE, UPDATE, and DELETE data. In blockchain DB, all data and transactions are stored and are immutable; therefore, the users can only perform READ and WRITE to the blockchain DB. READ means that they can read the content of previous transactions. WRITE means they can submit new transaction to update the state of the data.



## What is a Merkle tree/trie and how is it used in blockchain?
Merkle tree, also called as hash tree, is a tree that can be used to verify whether the data on leaf node is being modified or not. The parent node will store the hash value of its child nodes’ hash value and so on until the root node has stored the hash value of all the nodes.

Because each block on blockchain store multiple transactions, the merkle tree can be really useful in such scenario. Each transaction got its own hash value, which represents the leaf nodes in a merkle tree. And each block will store the hash value of the root node, which is the hash of the sum of all the hashed of all node. If someone tries to mutate the content of the transaction, the hash value of the tx, the hash value of its parent node, and the hash value of the root node will also be modified; consequently, the previous hash of the next block will not match the hash value of the current block and an invalid transaction will be detected.