There is very little doubt in the fact that blockchain technology holds a massive potential in shaping the digital world. The number of blockchain projects is increasing by the day, each with its own set of applications. Some intend to serve as an alternative to the traditional financial system while others seek to go beyond it. However, for blockchain to truly achieve its potential, it is important for all of these projects to work together. So far, it has been an individualised effort from most of the parties involved. In order to address this, Blocknet has developed an interesting protocol that aims to unify the entire blockchain industry.
What is Blocknet?
Blocknet is a protocol that aims to be the internet of blockchains. In effect, it aims to connect nodes of different blockchains to enable communication, cross-transfer of data and value between blockchains. This opens up new avenues for decentralised applications that are looking to take advantage of features offered by multiple blockchains.
For example, using Blocknet, you can build a decentralised app on the Ethereum Network and then connect it with the functionalities of other blockchains such as Tron or Nxt. This is definitely a remarkable improvement over the present scenario, wherein as a developer, you have to look for platforms which support the features you are looking for. Instead of doing that, all you have to do now is use Blocknet to build on whatever blockchain you please, and then pull features from other blockchains to customise your app.
In addition to this, Blocknet can also be utilised to exchange coins between different blockchain protocols, without the need for a third party centralised exchange. This has been made possible with the help of atomic swaps.
There are three components of Blocknet:
- XBridge - This is the backbone of the Blocknet protocol. It is essentially a router that connects nodes placed on different blockchains, thus enabling them to communicate with one another.
- A decentralised exchange - As explained earlier, using Blocknet, one can exchange and transfer coins, without the need for a third-party intermediary. This entire process is instant and is powered by atomic swaps. If you are looking to take advantage of this decentralised exchange, you can download Block DX from the official site.
- Inter-chain data transfer - In order to ensure interoperability between nodes, it is essential for these chains to be able to share and transfer data, services, and features with one another. This is supported by the inter-chain data transfer protocol, which in addition to the above features, also supports the execution of smart contracts.
Another intriguing feature of Blocknet is that it is completely decentralised. No central entity is responsible for running the network. In fact, the Blocknet Network is powered by a combination of Service Nodes and Staking Nodes. Since these systems are spread throughout the world, it is practically impossible to shut the entire network down.
The native currency of the Blocknet protocol is known as BLOCK. It is used for trading fees and other such purposes. In order to achieve consensus throughout the network, the algorithm utilised is proof-of-stake.
As mentioned earlier, Staking Nodes and Service Nodes keep the network running. Service Nodes are responsible for collecting and distributing trading fees, prevent spamming and DDoS attacks among other things. In order to run a Service Node, 5,000 BLOCK tokens are needed. On the other hand, Staking Nodes are tasked with the responsibility of confirming network transactions. There is no minimum requirement on the number of tokens needed to run a Staking Node. The mining reward is split between the two Nodes in the 70:30 ratio respectively.
Where to buy BLOCK Tokens?
As of May 17, 2018, the circulating supply of BLOCK token is at 5,144,667. BLOCK tokens can be purchased from cryptocurrency exchanges like Bittrex, Upbit, and Cryptopia. Being an altcoin, it is important to remember that BLOCK tokens need to be exchanged against Bitcoin.
BLOCK tokens can be stored in the wallets designed by the Blocknet Protocol. These wallets are available across Windows, Linux, and OSX. Alternately, you can also look into hardware wallets like Nano Ledger S and Trezor.
It is possible to mine BLOCK tokens. In order to do so successfully, you can either run a Service Node or a Staking Node. You will earn the mining rewards depending on the type of Node you run. To get started, you need to download the client wallet from the official website and follow the instructions.
BLOCK Price Trends
As of May 17, 2018, the price of 1 BLOCK token is approximately 18.13 USD. Unlike other cryptocurrencies, the BLOCK registered its first substantial bull run during the months of June, July, and August in 2017. In this period, the price rose from around $2 to $28, before plunging by roughly $10. The token commenced another bull run in November - around the same time as other coins in the cryptocurrency space. This time, the rally started at around $16 mark and by early January, the token was trading at levels close to $48.
The price of BLOCK increased quadrupled in less than two months. However, post mid-January, the altcoin went in a state of freefall. In early February, it was trading at levels less than $30 and by the end of March, it was approaching the $10 mark. The price recovered slightly in April, but failed to move past the $20 barrier.
Risks Associated with Investing in BLOCK
The technology behind Blocknet is appealing to those people who are looking to build decentralised applications on the Blocknet platform. As such, BLOCK token is needed by those individuals who are interested in contributing to the network, either by participating in its governance or by confirming the network transactions. From an investment point of view, BLOCK is considerably risky owing to its high volatility.
Therefore, it is recommended that you invest your money in other instruments like mutual funds. They are safer, legal, and can deliver decent returns in the long run, provided they are chosen wisely.