What is Blockchain Technology?
Blockchain is a new technology that you may be hearing frequently. But most of us are not absolutely aware of what blockchain is or the way to describe it to others. Mainly people assume that blockchain is bitcoin and vice-versa. However, it’s not the case. In truth, bitcoin is a digital forex or cryptocurrency that works on blockchain technology.
Blockchain technology was invented by Satoshi Nakamoto. As the name shows, a blockchain is a chain of blocks that contains data. Every block consists of some transactions and each transaction is recorded in the form of a hash. Hash is a completely unique cope assigned to every block in the course of its advent and any additional amendment within the block will cause a trade in its hash.
A block has particularly three elements:
- Statistics/records component- contain the facts of the transaction incurred
- Hash- unique ID of the block
- Preceding hash- hash of a preceding block
IMPORTANT FEATURES OF BLOCKCHAIN TECHNOLOGY
- Data saved in the blockchain is immutable and can’t be modified without problems as defined above. Also, the data is added to the block after it is authorized by using everybody in the network and as a result permitting cozy transactions. Folks who validate the transactions and add them to blocks are known as miners.
- Blockchain is decentralized in addition to an open ledger. Ledger is the file of the transactions completed and because it is visible to anybody, consequently is known as an open ledger. No person or any corporation is in charge of the transactions. Each and every connection inside the blockchain network has the same reproduction of the ledger.
- Blockchain provides a peer-to-peer network. This feature of blockchain permits the transactions to involve only 2 parties, the sender and the receiver. As a consequence, it removes the requirement of ‘third birthday authorization’ due to the fact each person inside the network is capable of authorizing the transactions.
For instance, if I am sending some money from the US to my friend in India through a bank, then the bank will be the trusted third party. First, it’s going to verify the transaction and then may also cut some charges for the transaction. For this reason, the blockchain comes into sight. It aims at removing 3rd parties in an effort to make the transaction fast and cheap.
PROSPECTS FOR THE DEVELOPMENT AND USAGE OF BLOCKCHAIN TECHNOLOGY
Blockchain technology offers the opportunity of creating a fraud protection system. It has a great capacity for use outside the digital sphere of cryptocurrencies.
• Banking: The usage of blockchain technology in the economic and banking sectors will guarantee the velocity, security, and performance of operations. For example, blockchain can save you from fraudulent activity or theft of personal facts by imparting traceable information about all transactions taking place in the network.
• Retail: Payments in the trade may greatly simplify the usage of blockchain, thanks to the use of digital currencies. The use of cryptocurrencies will ensure the safety of bills of all sizes, and will also permit transactions from around the globe to bypass quickly and appropriately. Similarly, blockchain systems will be capable of assisting huge manufacturers in tracking their delivery chain in any country in the world.
• Data storage: the amount of data created by means of man each day is growing swiftly. The use of cloud garages has proven powerful and has become a popular place to save big amounts of data. Nonetheless, serious issues continue to be related to the stability and safety of the garage. Blockchain generation can provide a secure records garage by means of powering open-source P2P networks. Distributed networks will join customers with their data with users who are capable of providing or hiring a garage for this fact as wanted.
•Aggregate with the internet of things: Today, the internet of things (IoT) is an internal network of operators and firms whose centralized structure can’t efficiently shield data protection and user privacy. The decentralization of blockchain networks can provide IoT with the ability to solve these problems. The usage of a point-to-point connection to transmit information no longer requires the introduction of unified information centers for synchronization and management. All operations, which include statistics series, issuing instructions, and updating software, may be transmitted through the blockchain network.
DECENTRALIZED FEATURE OF BLOCKCHAIN TECHNOLOGY
- The network is decentralized which means it doesn’t have any governing authority or a single person looking after the framework. As an alternative a set of nodes keeps the network making it decentralized.
- The other key feature of blockchain technology is that works perfectly with decentralized networks. Permit me to make it simpler. Blockchain puts us customers in a truthful role. As the gadget doesn’t require any governing authority, we are able to at once get the right of entry to it from the web and keep our belongings there.
- You may store anything starting from cryptocurrencies, important documents, contracts, or other valuable digital belongings. And with the help of blockchain, direct control is possible with the private key. So, you see the decentralized network is giving the commonplace humans their power and rights again on their assets.
Blockchain technology is increasing and enhancing every day and has a bright future in the upcoming years. It is an open technology as all things can be seen on the decentralized network. This transparency, trust, and temper-proof characteristics have led to many applications of it like bitcoin, Ethereum, and many others. It is a pillar in making business and governmental procedures extra secure, efficient, and powerful.