What is blockchain technology? It is the question in everyone’s mind these days. Let’s find out what is the blockchain definition and the blockchain technology.
The blockchain is a ledger that creates the record of the transactions of the public. This record is unchangeable. Every transaction or record is known as a block and each block is connected to a particular participant. New information can be written on the ledger but the information that is stored previously in blocks cannot be adjusted or changed. The record of every transaction is contained in the blockchain. So, now we got little information about what is blockchain technology. let’s dig more into the blockchain technology, benefits of the blockchain, history of blockchain and applications of the blockchain.
Benefits of Blockchain Technology
- Trustworthy System – The Data structure that is build using blockchain allows the users to make transactions as well as verify them without the involvement of any third-party. Because of this, the risk of backdoor transactions is reduced.
- Faster Transactions – Transactions that are made using blockchain technology are faster compared to the other transaction modes.
- Improved Traceability – Those who have a company that deals with such type of products that have the complex supply chain to trade know very well that it’s very hard to trace an item back to its origin. So, when these exchanges are recorded in blockchain you can easily find from where an asset came and where it stopped in its journey.
- Reduced Transaction Costs – The transaction costs are very low in blockchain technology. The reason behind is that there are no third-party or middlemen. All you need to do is just trust in the blockchain data.
How Does Blockchain Work
When into the blockchain technology, any new transaction comes, and then the nodes execute algorithms to verify and evaluate the history of an individual block that is proposed within the blockchain implementation. In case most of the nodes come to a consensus that this signature and the history is valid, then the transaction of new block into the ledger is accepted and to the transaction chain, a new block is added. On the other hand, if the majority of nodes do not accept the addition of the entry of the ledger, then block is not added in the chain.
Types of Blockchain
There are three types of blockchains
1. Public Blockchain
2. Private Blockchain
3. Consortium Blockchain
These types of blockchain have no access restrictions. It means that anyone who has an internet connection can send the transactions to it. These types of Blockchain are based on POW (Proof of Work) consensus algorithms. So, anyone can download the code and can run a public node on his device. Also, he can validate the transactions in the network.
These types of blockchain are Permission. What that means is anyone can join the network only then if he is invited by any network administrator. In private blockchain, the access to the participant and validate is restricted. The companies that are interested in the blockchain technology but are not comfortable with the public blockchain are termed as private blockchain.
These types of blockchain are semi-decentralized. These are operated by a group’s leadership. In Consortium Blockchain the person who has the internet cannot participate in the transaction verifying process. These types of blockchains are faster than the others as well as these provide more privacy for transactions. Mostly consortium Blockchain is used in the banking sector.
From Bitcoin to Blockchain: A Brief History
Bitcoin and its blockchain’s concept were introduced for the first time at the end of the year 2018. It was introduced as a whitepaper and in 2009, released as open-source software. Bitcoin was presented by an anonymous programmer or group who were working under the name of Satoshi Nakamoto.
Until 2010, Satoshi worked with many open-source developers on Bitcoin. Since then, Satoshi or the group wasn’t involved in the project. The project control transferred to the Bitcoin core developers. Satoshi wanted to close the large hole in digital trust and because on this, he came up with blockchain technology. It solves the many online problems of people. Most of the Bitcoin enthusiasts feel that the technology of blockchain is the missing piece that will allow societies to entirely operate online. The reason behind is that it reframes trust by storing relevant information and this information cannot be removed.
Bitcoins – Bitcoin is a digital currency which was created in 2009 by an unknown person. The person or group who introduced it used the alias Satoshi Nakamoto. Bitcoin uses the rules of cryptography for the generation and regulation of units of currency. It can be used to pay for the things electronically in case both parties are willing.
- Ethereum – Based on the technology of blockchain, Ethereum is an open software platform that allows the developers to build the decentralized apps. It is a distributed public network of blockchain just like Bitcoin but for the purpose of capability, ethereum and Bitcoin differ substantially.
- Litecoin – Litecoin is the second most important digital coin. As of June 2015, it had the 3rd highest market cap.
- Ripple – Ripple has a very large supply and because of that, it has a steady price. Ripple had to stay power over time.
- Monero – Monero is an open source cryptocurrency which was created in April 2014. The main focus of this cryptocurrency is on decentralization and privacy.
Applications of Blockchain
The blockchain is an up-to-date technology that is expected to bring innovativeness in plenty of businesses. Blockchain technology is primarily associated with financial industry but there are many other areas that it can benefit.
• Blockchain in Healthcare – It can help the healthcare industries as there is much need for data protection and exchange. So in healthcare industries, it can be used a secure and transparent recording of medical data.
• Blockchain in Voting Processes – Blockchain can play a very crucial role in the voting process as there is data security is a major concern.
• Blockchain in Travel Industries – With the help of Blockchain technology, travel providers can sell service for almost free. So they don’t have to pay for accessing their large databases to global distribution systems.
The adaption of blockchain will allow the people to secure their digital relationships that were not possible before. In this technology, the data is disclosed, secured and recorded differently.
Do add the information in comments if we miss anything in this article.