Blockchain Basic Chain Explanation: Definition, Classification, and Development Stages

Basic Chain Concept

The basic chain is an independently operating Blockchain platform that achieves data storage, verification, transmission, and communication through its distributed node network. It has characteristics such as immutability, openness, decentralization, anonymity, and autonomy.

From a macro perspective, blockchain projects can be divided into two categories: "coin" and "token". Understanding whether a project is a coin or a token allows one to determine if it belongs to the base chain projects.

The Difference Between Coin and Token

Coin refers to the native digital currency on the underlying Blockchain, which has the nature of "fiat currency". It is issued by projects that establish their own underlying Blockchain.

A Token is a type of token issued by blockchain applications (such as DApps and smart contracts) developed on the underlying blockchain, possessing certificate attributes. In simple terms, a token with certificate attributes issued by projects on the underlying blockchain is called a Token.

Currently, many projects conduct private placements through white papers in the early stages, and the issued project tokens are only temporary certificates and proof of investor rights. After the project goes on the Blockchain, there will be an exchange of Token and Coin, and theoretically, the project party should reclaim all Tokens and cease their use.

Development Stages of the Blockchain

1. The 1.0 era represented by Bitcoin

In early 2009, the Bitcoin network began operating. After years of successful operation, traditional financial institutions gradually recognized the innovative nature of the blockchain technology that supports Bitcoin and began exploring blockchain, especially the underlying chain technology.

2. The 2.0 era represented by Ethereum

Around 2014, various industries realized the widespread application value of Blockchain technology. During this period, many multifunctional base chains emerged, such as Ethereum, which supports various business scenarios through smart contracts.

3. The 3.0 era represented by EOS and others

Since 2017, the demand and requirements for the new generation of foundational chains have become more clear. Foundation Chain 3.0 generally refers to blockchain projects that can quickly run various DApps. New projects represented by EOS are currently under development, but the ultimate winner has not yet been determined.

The Significance of Studying the Underlying Blockchain for Investment

1. The application chain originates from the basic chain.

The relationship between application chains and underlying chains is similar to that of branches and trunks. The lifecycle depends on the model, and core competitiveness determines the lifecycle.

2. The cost of the base chain is higher than that of the application chain.

The cost of wrongdoing on the基础链 is relatively high. In contrast, the application chain places more emphasis on community building, has lower technical requirements, but is more likely to evolve into a Ponzi scheme.

3. Air coins mainly come from application coins

Currently, it is very easy to issue ERC20 tokens on Ethereum. According to statistics, over 1,000 tokens have been issued based on the Ethereum Blockchain. Caution is required when investing to distinguish between scam coins and quality projects.