BLOCKCHAIN TECHNOLOGY- EVERYTHING YOU NEED TO KNOW!

by Ashwin P. Blogger Enthusiast

Introduction

If you observed the trade for the last decade, you will notice a significant change. The latest affair of bitcoin turned millions of heads around and forced to search what is a digital currency. Bitcoin is the cryptocurrency that provides a decentralized way of currency exchange without paying for trading fees. Bitcoin is the best example of the blockchain network. The blockchain technology is an undeniably ingenious invention by Satoshi Nakamoto. The technology leading company IBM unveiled ‘Blockchain as a Service’.

What is blockchain technology?

According to the definition, blockchain technology is the distributed ledger based on the P2P concept that is managed by a cluster of computers. A blockchain system attributes two types of records:

· Digital transaction- block

· Public database – chain

The digital transaction is divided into three parts:

· Information details about the transaction

· The transaction participants

· Hash- the cryptographic code that distinguishes blocks from each other.

Thus, each block of data is securely bound to each other by a chain. The uniqueness of this technology lies in no centralized authority control. The shared ledger opens the information for everyone and thus everyone’s action is accountable.

How does blockchain work?

Each block of the blockchain is connected with the previous one with the cryptographic hash. This hash takes data from the previous block and transforms it into a compact string. The unpredictable feature of these strings made them easily detectable if tampered. Following is the sequence of actions happens when a new block is added to the blockchain:

· A transaction occurs

· The transaction is verified

· The transaction gets stored in the block

· The block must be given to a hash

As these transactions must require an exceptional database to store and that too in the cryptographic mode, there are some dedicated players that are explicitly used for blockchain systems:

· R3

· Hyperledger

Many big names like IBM, London Stock Exchange, HSBC, and Intel have started using blockchain technology and have improved their business attributes.

What are the prominent features of blockchain technology?

· Decentralization

· Transparency

· Immutability

Apart from the above-mentioned features, blockchain technology possesses faster settlement, distributed ledger, consensus, and enhanced security features. The above features make the blockchain technology a strong player in the current technology market.

Blockchain Practical applications

The on-paper full-proof technology is suitable for various practical applications. The blockchain technology provides a way more reliable option for storing data about transactions. Practical applications like property exchange data, election voting data are the ideal instances of blockchain technology. Look at the long list of real-life application domains where blockchain technology has started spreading its wings:

· Banks

· Cryptocurrency

· Healthcare

· Property records

· Smart contracts

· Sharing economy

· Crowdfunding

· Governance

· Predication markets

· IoT

Advanced versions of blockchain technology that is Blockchain 2.0 has started finding new routes going beyond financial applications boundary. The music business, supply-chain management, and lots more are new areas where blockchain is finding its routes.

Pros &Cons of blockchain Technology

Pros of blockchain technology include:

· Accuracy of the chain

· Cost reduction

· Private and secure transactions

As every coin has two sides, blockchain technology is not an exception. Just have an overview of the cons of the blockchain technology:

· Low transaction per second

· Hack-prone

· History of use in illicit activities

· Significantly technology cost

Conclusion

Blockchain technology has transformed the way of trading and is seeking to explore new ventures with its more advanced features!