Blockchain allows users to own coins and have full control over them. No third party can take your coins or prevent you from being able to spend or otherwise use them at any time. Blockchain networks can provide this for native coins such as ADA, BTC, and ETH. In the case of tokens, there are differences between platforms. Cardano treats tokens similarly to ADA coins, so it will not allow anyone to have control over the tokens that users have in their wallets. Ethereum is more versatile. It allows the token issuer to have control over tokens all the time of their existence. Let’s explore the differences between tokens on Cardano and Ethereum.
The blockchain protocol is a set of rules and instructions regarding all functionality offered by the given project. In the protocol, you will find rules regarding the maximum number of native coins, rules for their gradual release into circulation, etc. It defines the rules (spending conditions) for the transfer of coins from address to address.
When a user submits a transaction to the network, the protocol validates the transaction according to the prescribed rules. The protocol accepts only valid transactions.
The rules of the protocol are defined by the team. All participants in the network consensus oversee compliance with the rules. The rules can be found in the publicly available source code repository (GitHub).
You can say that the coins (your assets) are protected by decentralization, as the rules cannot be arbitrarily changed by a third party. The majority of participants in the network must agree to change the rules.
If there is no defined way to freeze the account in the rules, the protocol will not allow this. Censoring transactions (or blacklisting addresses) is almost impossible to enforce. If network decentralization is high and at least a minority of participants (block producers) will not censor transactions, all users can spend coins.
In the picture below you can see Alice and Bob using the protocol through their wallets. The team has defined the rules of the protocol. The team’s control over the rules is limited in a decentralized network because the network is controlled by the…