In this article, we tried to take one of the abstruse topics and break it down as simply as we could. Today we will cover 6 topics to help you better understand – 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 simplify our lifestyles. Lately, life became 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. It has transformed the traditional financial system into a modern and amazing digital system.
Blockchain introduced itself by developing a digital currency (cryptocurrency), called Bitcoin; which can be used in place of fiat (Traditional) 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.
Blockchain keeps transactional records, history, and data with ensured security, transparency, and decentralization. It is a chain of blocks containing information/data which are not supported by a single authority. These blocks are attached through cryptography(the art of writing or solving codes), 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 part of the Blockchain network. Once a piece of information is entered on a 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.
How does the Blockchain work
An agreement is generally known as consensus. It 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. After 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 network.
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.
Who Controls Blockchain?
There is no external or internal authority/body to control a such-based network. The reason is; Blockchain is a distributed and decentralized network. Every node has a copy of all the transactions and data. No one can make changes to the information written in the blocks of a chain as it has not been stored on an individual node or entity. Blockchain is a peer-to-peer (P2P) network. Which makes such a network considered a transparent, secured, reliable, immutable, and well-established platform of this modern era.
How Secure is a Blockchain network?
There is a cryptographic hash that transforms the input value into a fixed length of alphanumeric characters. Blockchain uses hash functions to create a unique identifier because it needs to create blocks and perform transactions. Every block in the network has the value of the previous block. One of the main features of Blockchain is to maintain the security of the whole network.
Blockchain network truly is one of the biggest developments of the 21st century. Even though such information might be a bit hard for you to keep up with, involvement in such an industry will help you to foresee the great opportunities worth investing in. It laid the foundation for a brand new type of era. The era where people can manage their funds directly without the interference of a third party with the help of Cryptocurrencies.
Crypto offers lots of benefits and strengths over traditional currency, such as having transparency, anonymity, and security. In addition to these perfect benefits, digital currency allows you to make transactions much cheaper and faster. This is one of the many reasons why you should consider getting involved in Cryptocurrencies if you have not been involved yet.
Hope you enjoyed!
If you’re interested, here’s our article which will give you clear insight of what you need to know before investing in Cryptocurrency.