What is Blockchain
This modern era is all about technology. With the increase of modernization in every aspect of life, new life-changing technologies are being invented and deployed to facilitate humanity. Now life has become quite easy as we are facilitated in every sector of life with modern and advanced technologies.
The revolutionary technology; Blockchain is putting a great impact on different industries especially on fintech, supply chain, crowdfunding, digital voting, tracking systems and digital payment systems, etc. Blockchain has transformed the traditional financial system into a modern and amazing digital system. Blockchain was introduced by developing a digital currency (cryptocurrency), called Bitcoin; which can be used in place of fiat currency for trading. Now, blockchain is impacting every industry in a very effective way due to its unique features; like immutability, decentralization, transparency, enhanced security, and faster settlement.
Here is a brief discussion on this hot and in-demand technology:
How does the Blockchain work?
Blockchain can be defined as a data structure that keeps transactional records, history, and data with ensured security, transparency, and decentralization. It is a chain of blocks comprising of information/data which are not supported by a single authority. These blocks are attached through cryptography, by which the confidentiality of the transactions remains intact. For better understanding, it is a distributed ledger that is completely visible and accessible to every one part of the blockchain network. Once a piece of information is entered on a blockchain network then it is impossible to alter. The reason is, encryption and digital signatures are used to protect the stored data to make it tamper-proof data.
An agreement that is generally known as consensus; must be reached/confirmed by the network participants to perform/approve a transaction. Before adding a new block to a blockchain network, users will have to meet an agreement to validate that data or transaction, and whenever a new block is added all the users verify it by using a common protocol. Basically, there is a consensus algorithm that all the nodes have to accept before adding a new block to the blockchain. All the data on a blockchain-based network is recorded digitally and gives the history of all the transactions to all network participants. In this way, there is no single chance of any fraudulent activity or duplication of transactions and this all happens without the need of a third party.
There is a cryptographic hash that transforms the input value into a fixed length of alphanumeric characters. Hash functions are used in Blockchain to create a unique identifier while creating blocks and performing transactions. Every block in the blockchain has the value of the previous block. It is one of the main features of blockchain to maintain the security of the whole network.
There is no external or internal authority/body to execute a blockchain-based network. The reason is; blockchain is a distributed and decentralized network where every node has a copy of all the transactions and data. That’s the reason, no one can alter information written in the blocks of a chain as it has not been stored on an individual node or entity. So, being a peer-to-peer (P2P) network, blockchain is considered a transparent, secured, reliable, immutable, and well-established platform of this modern era.
The revolutionary technology; Blockchain is putting a great impact on different industries especially on fintech, supply chain, crowdfunding, digital voting, tracking systems and digital payment systems, etc. Blockchain has transformed the traditional financial system into a modern and amazing digital system. Blockchain was introduced by developing a digital currency (cryptocurrency), called Bitcoin; which can be used in place of fiat currency for trading. Now, blockchain is impacting every industry in a very effective way due to its unique features; like immutability, decentralization, transparency, enhanced security, and faster settlement.
Here is a brief discussion on this hot and in-demand technology:
Blockchain can be defined as a data structure that keeps transactional records, history, and data with ensured security, transparency, and decentralization. It is a chain of blocks comprising of information/data which are not supported by a single authority. These blocks are attached through cryptography, by which the confidentiality of the transactions remains intact. For better understanding, it is a distributed ledger that is completely visible and accessible to every one part of the blockchain network. Once a piece of information is entered on a blockchain network then it is impossible to alter. The reason is, encryption and digital signatures are used to protect the stored data to make it tamper-proof data.
An agreement that is generally known as consensus; must be reached/confirmed by the network participants to perform/approve a transaction. Before adding a new block to a blockchain network, users will have to meet an agreement to validate that data or transaction, and whenever a new block is added all the users verify it by using a common protocol. Basically, there is a consensus algorithm that all the nodes have to accept before adding a new block to the blockchain. All the data on a blockchain-based network is recorded digitally and gives the history of all the transactions to all network participants. In this way, there is no single chance of any fraudulent activity or duplication of transactions and this all happens without the need of a third party.
There is a cryptographic hash that transforms the input value into a fixed length of alphanumeric characters. Hash functions are used in Blockchain to create a unique identifier while creating blocks and performing transactions. Every block in the blockchain has the value of the previous block. It is one of the main features of blockchain to maintain the security of the whole network.
There is no external or internal authority/body to execute a blockchain-based network. The reason is; blockchain is a distributed and decentralized network where every node has a copy of all the transactions and data. That’s the reason, no one can alter information written in the blocks of a chain as it has not been stored on an individual node or entity. So, being a peer-to-peer (P2P) network, blockchain is considered a transparent, secured, reliable, immutable, and well-established platform of this modern era.