What Is Blockchain Technology

  • May 29 ,2019

Blockchain Technology is still a vague term to the majority of people and for those who are familiar, we will surely admit that it is the future and revolution in Information technology. So, let’s jump into blockchain explained.

There are many differences between Blockchain and cryptocurrency. Blockchain is a distributed database, while Bitcoin is a cryptocurrency. Blockchain technology underpins Bitcoin, but it has a wide range of applications. Anonymity is promoted by Bitcoin, whereas transparency is promoted by blockchain.

Before blockchain technology came into the news, the cryptocurrency known as bitcoin, took a lot of attention and is still in use. Satoshi Nakamoto invented a blockchain article in 2008 on Bitcoin. It was about peer-to-peer electronic cash Systems. Since then, bitcoin has gained authorization in top countries like the USA, CANADA, AUSTRALIA, and EUROPEAN UNION.  Blockchain networks follow a similar architecture beyond Bitcoin. Many financial institutions are leveraging blockchain for growth.

It first came into existence in 1991. In recent years, there has been drastic development in blockchain applications and various sectors have initiated this technology. after that many financial institutions and banks uses blockchain.

What exactly is Blockchain?

Block is a list of digital records. In Blockchain networks, these digital records are together in a chain that uses cryptography.

Blockchain allows all participants in a supply chain to have access to the same data, potentially minimizing communication and data transfer problems. Spend less time validating data and more time can be spent increasing the quality of goods and services, lowering costs, or doing both.

IBMs Blockchain is a public cloud service that customers can use to build secure blockchain networks. 

The major two types of blockchain are: 

Public Blockchains

The Public Blockchain network is decentralized and distributed. So, there is no central authority. In a blockchain, data is accessible to everyone, and they can access it.

Privatized Blockchains

Private blockchain networks are only partially decentralized because public access to these blockchains is restricted.

Bitcoin blockchains’ is a distributed ledger, a series of linked blocks containing transaction records, that is undergirded by complex mining processes to ensure the integrity of transactions. The blockchain is public, meaning anyone can view transactions occurring on it.

A credit score is a number that lenders and other third parties use to assess the risk of lending you money. Banks, credit card companies, and other financial institutions use the score to determine if you can or will be able to pay off any obligations you accrue. A higher credit score demonstrates your willingness and ability to repay any loans you may be approved for based on your current financial circumstances and previous behaviour.

While blockchain may be the next stage in the digital evolution, certain blockchain implementations are still vulnerable to risk. Internal audit will be required to play a critical role, not just in delivering traditional assurance, but also in anticipating and evaluating these new and developing risks as a trusted business advisor. Internal auditors can use our three-part course to assist them in fulfilling their responsibility.

How does it work?

The information that is stored in a blockchain is shared with everyone. The stored information is not confined to a single location, rather it is hosted by many networks of computers.  It is accessible to every public therefore, the information can be easily verifiable and one cannot tamper with the data without any medium.

Public blockchains are permissionless and entirely decentralized, allowing anybody to participate. Currently, public blockchains are mostly utilized for bitcoin exchange and mining. Blockchains like Bitcoin and Ethereum are constantly growing as new blocks are added to the chain, increasing the security of the ledger dramatically.

Applications of Blockchain Technology

File Storage

Decentralization which is one of the very important features of Blockchain helps to store and protect data. The decentralized file system means the sharing and streaming time is faster.

Smart Contracts

Smart contracts perform simple functions. For instance, a derivative could be paid out when a financial instrument meets a certain benchmark, with the use of blockchain technology and Bitcoin blockchains, enabling the payout to be automated.

Internet of Things

Internet of things means controlling electronic-related things over a network such as A.C, CCTV, etc. Smart contracts enable the use of machines via a remote system. The Smart Contracts feature of blockchain technology enables to exchange of data between objects and mechanisms which improves efficiency, and less costing charge.

Data Management

Data Management is one of the important aspects of BlockChain technology. In the future, you will be able to sell your products or services without any third medium. The data in social media can be sold.

For Land Registration

Blockchain technology is very significant for keeping publicly accessible ledgers. Land registration tends to be a fraud and there is a high chance of mistakes or corruption. The use of blockchain in this field will drastically improve the land registration process, preventing fraudulence.

Blockchain networks stand by their three major principles:

  1. Decentralization
  2. Transparency
  3. Immutability

Decentralization

As I have discussed earlier, in blockchain technology, information is accessible to everyone. There are millions of computers where data is accessible to everyone. So, there is no nay server or central authority to control the data or information.

Transparency

Transparency means when a person performs a certain transaction, you won’t find his name or any identity like “Smith sent $800 to john”, you would rather find “rebgj1324gnsdjk8” sent $800 to “23bfbbsb”.

A blockchain is ostensibly a transparency machine in which anyone may join the network and, as a result, see all of the data on it. The transparency of blockchain allows users to look through the history of blockchain transactions in the case of cryptocurrency.

Immutability

Immutability means the information that is in the blockchain networks that cannot be tempered. There will be a drastic change in the hashing code which makes it impossible to hack.

Blockchain For Business

Blockchain for business is valuable for entities transacting with one another. With distributed ledger technology, permission participants can access the same information at the same time to improve efficiency, build trust and remove friction. Blockchain also enables a solution to grow and expand quickly, and handle various jobs in a variety of industries. Blockchain for business delivers these benefits based on four attributes unique to the technology.

Virtual currencies are value representations that can only exist in digital form. Their transactions take place over the Internet or on online networks. In contrast to a money market, which buys and sells short-term debt, capital markets buy and sell long-term debt or equity-backed assets.

Overwhelming speculations on thousands of various cryptocurrencies, as well as countless initial coin offering (ICO) scams, have sparked heated disputes over this new technology. The importance of decentralized applications (dApps) and the future worth of blockchain traces the development of blockchain systems.

Conclusion

Blockchain is the most secure and widely used wallet. It’s a cryptocurrency wallet that helps to invest in and store cryptocurrencies.

Block time is the time it takes to construct a new block in a bitcoin blockchain. Miners compete against one other to validate transactions and solve the hash, resulting in the creation of another block.

A hard fork (or hard fork), as it relates to blockchain technology, is a radical change to a network’s protocol that makes previously invalid blocks and transactions valid, or vice-versa. A hard fork requires all nodes or users to upgrade to the latest version of the protocol software.

The underlying mechanism for achieving consensus between the network’s nodes is highly related to the energy consumption of blockchain solutions. Proof-of-Work blockchains, such as Bitcoin and Ethereum, are notorious for their excessive energy consumption.

For more information, feel free to leave your comments about any query about BlockChain Technology. 

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