The What, Why, How and Where of Blockchain
Blockchain is the most disruptive technological innovation that came into existence since the Internet. It is presumed to lead a digital revolution touching all the major sectors in an impactful way. Here you will get a quick overview of what, why, how and where of blockchain helping you to grasp its importance.
What is blockchain?
It refers to a type of data structure that enables identifying and tracking of digital transactions and sharing this information across a distributed network of computers.
Though originally invented for the cryptocurrency Bitcoin, blockchain is now finding great potential uses in the technology realm. Let’s check out some of the reasons for this.
1. Blockchain is a decentralized platform
Instead of simply storing data or information in a single central storage, data is stored on computers all over the world. This ensures that no malpractices, including cyber criminals, can gain control over it.
2. Blockchain provides secure storage of data
As on date, none of the blockchain networks has been breached or hacked. It uses cryptocurrency and the blocks are secured with unique private keys and public keys. Whenever a person wants to make a financial transaction through the blockchain, he/she will provide with a key that can be used to finalize the transaction between them and supposed to transfer the money to or accept from.
3. Blockchain has introduced transparency
Blockchain’s decentralized mode of working ensures transparency. Everyone can see it or access can be restricted so that only a select poeple can view it. A copy of the ledger is created on every system which belongs to the blockchain. Because of this, any change in the network would make it virtually impossible for a hacker to succeed without someone noticing and that makes more security. Hence we can say it is immutable.
4. Blockchain ensures reduced costs
With blockchain, we don’t need any middlemen to make guarantees. Instead, we just have to make the trust on blockchain data.
5. Blockchain is faster
Blockchain makes the transaction processes considerably faster than today’s banking networks. With blockchain, transaction validation and settlement can be done in a faultless manner within seconds. Today the networks can hold cross-border payments up to five business days while being validated.
How Blockchain Works
When a new transaction or an edit to an existing transaction is going to happen to a blockchain, the majority of the nodes in the system within a blockchain implementation must execute algorithms to verify the history of the individual blockchain block that is proposed. If the majority of the nodes come to a consensus that the history and signature (private key+ public key) is valid, the new block of transactions is accepted into the ledger and the same will be added to the chain of transactions. If a majority does not concede to the addition, it is denied and not added to the chain.
Where We Use the Technology
Following are the some of the examples where we can use the blockchain technology.
Distributed Cloud Storage – Currently, the cloud storage is not a decentralized one, hence users have to put their trust in a single storage provider.
Digital Identity – Digital security is a huge problem in the world. Digital security is now estimated to cost the industry about $18.5 billion annually. It implies that for every $3 spent, $1 is going to prevent.
Finance – Major application of blockchain is in the field of finance. We can have Bitcoin for transferring the financial transaction instead of paper cash. Apart from BitCoin, we have Litecoin, Peercoin, or Dogecoin, among others, where we use an electronic coded address to make the transaction.
Digital Voting – Another future area of blockchain is Digital Voting. With the help of blockchain, we can make your vote anonymous and keep better security.
Stock exchange – For the traditional stock market, there is a 2–3 days for settlement of stocks and bonds. BlockChain helps to make the settlement within seconds.
Real Estate, Encrypted Messaging, Decentralized Social Networking Sites, Decentralized Markets etc. are other examples.
Blockchain is considered to be a futuristic technology that has several applications. Most of the organizations are starting to find ways they can hold blockchain in their operations to procure the benefits of this ever-evolving technology.