The blockchain is connecting people around the world.

Ecosystems on the Blockchain

What is an ecosystem in terms of blockchain technology?

You might have heard the term ecosystem in relation to Ethereum. The Ethereum blockchain that enables people to create smart contracts or new cryptocurrencies and build applications has been compared to a natural ecosystem. Ethereum has many distributed applications (Dapps) where you can create NFTs, smart contracts and create cryptocurrencies (tokens). A digital ecosystem is known as a value network that uses the blockchain and data decentralization. A value system refers to the different actors, for blockchain technology these actors are miners, developers, and users. Each actor provides a different value to the system and without one participant the system would collapse.

As a decentralized system community is very important and there are different functions each member has, as in a biological ecosystem. Nothing works unless each part of the system or network is connected and working.

Just like in a biological ecosystem, all parts have to work together.

Benefits of Digital Ecosystems

Ecosystems ensure better cybersecurity, transparency, and independence. This is because with increased trust from each participant relying on the others. One example of why ecosystems provide better cybersecurity is mining. Mining is distributed across many computers that prove each transaction to be “true” or “false”. The ledger on the blockchain ensures collaborations and a safe, encrypted record system. What makes many cryptocurrencies so valuable is their underlying purpose, how they use their data. For example Ethereum is so popular and successful due to their smart contract system that allows for more networks to be built.

One error in the code, and everything starts crashing down.

Examples

Ecosystems ensure that select information can be available to specific users. For example, if medical records would be stored on the blockchain, the information would still be protected by doctor confidentiality, and certain records would be hidden from users who don’t have legal access to the data, verified by a smart contract. Participants of the ecosystem are the ones that get to make decisions on what happens with their data and if it’s public or private on the blockchain.

When I was reading about the Pudgy Penguins, I was able to click on their smart contract and read it, each transaction was visible. This is an example of where the data was made public in its ecosystem.

Our knowledge grows aside the improvements of technology.

Ecosystems Evolving at Rapid Speeds

Since blockchain technology runs on the proof of work system that relies on miners, the need for collaboration of participants is always there. Ecosystems on the blockchain accounts for critical and innovative thinking in order to make improvements. With these improvements comes adaptations and the network grows.

With technology improving so quickly, the users need to adapt with it to ensure the compatibility to the smart contracts. This is why updates are very important. Hard forks and smaller ecosystems are what ensure the security and the growing ability of the blockchain.

Written by Rosalie Mosner.

DeFy Trends is a women-founded, all-in-one, intuitive, real-time analytics application and chrome extension that uses on-chain analysis and high tech data science algorithms to provide data insights based on DeFi fundamentals and sentiment. By scraping the web and social media for cryptocurrency sentiment analysis, incorporating real-time market data, qualitative data, and forecasting AI to bring retail and institutional investors state of the art insights on the rapidly growing crypto-decentralized finance markets.

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We are a women led start-up that provides traders & investors with AI and data-driven crypto insights and education to make informed investment decisions

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