What is Blockchain Technology? How does it work?
What is Blockchain?
A blockchain is a digital ledger transaction and tracking assets in a network of computer system on the blockchain. A blockchain records and stores informational in a digital format which Is difficult or impossible to change an information or a system. A blockchain collects information together in groups known as blocks, that holds a set of information, it is a growing list of records linked together using cryptography.
Blockchain typically referred as Distributed Ledger Technology (DLT) which makes or stores the history of any digital assets and transparent through the use of decentralization and cryptographic hashing.
What is Blockchain Technology?
Blockchain Technology is a structure that stores an information and transactional records known as “block”, of a public database known as “chain” in a network connected to a peer-to-peer nodes. The storage is referred as a “digital ledger”. Every transaction in the ledger that stores transactional information is authorized by the digital signature of the owner of the digital asset, this is how a blockchain technology considered as highly secured in a computing system.
Blockchain technology was invented in 1991 by two mathematicians Stuart Haber and W. Scott Stornetta. The technology was early popularized by Satoshi Nakamoto in 2008 to serve as a public transaction ledger of the Bitcoin.
How does Blockchain Technology works?
As a transaction happens, each transaction recorded as a “block” of data. The data block is recorded as an information. Each block is connected to the peer-to-peer nodes. Those blocks form a chain of data as an asset and confirms the set of transaction as time or sequence of transactions. Each transaction are block together in an irreversible chain.
Blockchain Technology is best known for its application in cryptocurrency such as Bitcoin and Ethereum.
Read Also: What is Machining Learning?
Advantages of Blockchain Technology:
The advantages of blockchain technology are as follows,
- Blockchain technology is a decentralization process. It does not store any transaction information in a central location.
- Blockchain eliminates the third-party verification, it does not need any third-party transaction fees.
- The accuracy of the blockchain network is very high as the transaction does not have an involvement of human interaction, only the set of computers blockchain networks perform the transaction.
- The transactions of blockchain technology are very secured as the thousands of computer networks validate the transactions.
- The transactions of blockchain technology are very efficient. It usually takes as 10 minutes for a particular transaction.
Applications of Blockchain Technology:
Blockchain technology stores transactional data and information securely and it is a very reliable technology in the computing system and have great potential for future aspects. And many companies like Siemens, Walmart, IBM, Unilever and many more companies are using so far a blockchain technology.
There are many applications of blockchain technology are in various fields as follows,
Cryptocurrency: One of the best applications of blockchain technology is in cryptocurrency. There are thousands of cryptocurrencies are running on blockchain technology. Blockchain forms currencies like Bitcoin and Ethereum now are becomes one of the most popular and important assets around the world. Blockchain allows cryptocurrencies to operate without any need of central authority.
Banking and Finances: The financial institutions and banks work on specific time during business hours usually on business days and the transactions takes around 24 hours business hours to complete particular transaction. Blockchain technology operates 24/7 and available every time to perform a work and transaction takes a proceeds time as little as 10 minutes.
Art and NFTs: Every art is a collectible in its physical form. Blockchain allows a digital art, photo, gif, picture as a Non-Fungible Token (NFT) it’s a non-interchangeable unit of data stored on a blockchain. NFT provides a claim, proof of ownership of a digital asset.
Smart Contracts: A smart contract is built into the blockchain to verify and facilitate the contract agreement. Smart contracts operate under the set of conditions for user agreement.
