`Blockchain is a technology that allows data to be stored securely across distributed computer networks. This means that the information stored on the blockchain is available to anyone, but not editable unless certain conditions are met. This distributed database maintains a list of data records secured from tampering and revision. In this post, I will tell what is Blockchain and what are its advantages?
What Is Blockchain
Blockchain is a public distributed ledger. It securely stores the record of all transactions either made using Bitcoin, or other cryptocurrencies. Blockchain allows users to keep track of their crypto assets and all transactions quickly, easily, and secure way.
Block-chain or Distributed Ledger Technology (DLT) is a foundational technology that has the potential to transform many industries globally, driven by new business models that are enabled through open networks, participatory cooperation, and increased transparency.
They extends functionality beyond cryptocurrency to include smart contracts and distributed applications (dApps) that can automate processes, remove middlemen costs and provide greater confidence in transactions.
From Bitcoin wallets, all Bitcoin transactions are conducted. When any transaction takes place there is a transfer of value between more than one Bitcoin wallet. The transaction gets submitted to a public pool of pending transactions. Miners get the pool of pending transactions and start the process of trying to figure out a hard mathematical problem. Once solved, the miner gets rewarded with a certain number of Bitcoins. The transaction also gets validated and becomes part of a block in the blockchain.
Blockchain has many advantages like this technology is a decentralized, distributed public ledger and database that maintains a continuously growing list of records called blocks in such a way that it is extremely difficult to change them once recorded.
It operates like a database. Each network has an ecosystem of participators, called nodes. These members maintain and validate data in the blockchain. Every node contains a copy of all historical transactions in the blockchain and therefore no single entity owns or controls the database.
Advantages Of Blockchain
Blockchain offers a long list of features which includes high security for everything stored in it. All the people connected to that blockchain can access the same data. It has unique features such as, it speeds up transactions. Blockchain technology has provided so many interesting and unique features and because of its multiple advantages in all sectors of life, a large number of people are following it. Many industries have adopted it for their transactions and finance. I am going to discuss some advantages of Blockchain Technology.
Direct Transactions With No third-party intermediaries
One of the best feature in Blockchain technology is, the data stores in the form of blocks in a chain where each data block in the chain has a cryptographic hash of its previous block. Also, it saves data related to transactions, and its own hash. While using blockchain for your business, you will get rid of the intermediaries to transact directly with your customers. Since, it helps in building the trust of your customers it also helps you grow your business. So, if you know how blockchain technology works it could benefit your business a lot.
Transparent And Immutable
Blockchain’s main advantage is that it is considered to be unhackable because of its secure, peer-to-peer decentralized network that uses the hashing cryptography technique for encrypting the information stored and shared in blocks. In addition, blockchain technology records and stores every transaction that ever occurred in the network in a transparent manner. Each block contains a time stamp as well as a link to the previous block thus forming an immutable chain. Since, its immutable so no other person or party can delete or alter the data.
Simple And Easy To Use
We can use blockchain as simple as sharing a document, such as a photo, with someone who does not live with you. Blockchain not only stores the data but it also verifies the transparency and security of the image. It will be there forever so anyone can find it at any time and that you can know that it hasn’t been tampered or altered.
No single entity or group controls the network. Each participant on the blockchain can easily make transactions because it has decentralization. Transactions are grouped into blocks, and through cryptography, users can access the blockchain. We can ensure integrity in the way everyone uses the blockchain because it has built-in safeguards against invalid data entering the stream.
Because of the decentralized, distributed nature of Blockchain technology, it is extremely difficult for any one entity to alter or falsify the data. It offers a more secure way to share data with others.
Blockchain is a very secure database, which works on three pillars that are transparency, decentralization, and immutability. Also, no body can corrupt or alter this database retroactively. Also, it is very resilient towards attacks. Bitcoin has proved the security of blockchain.
The Bitcoin blockchain network is a self-sustained network, and relies on the combination of three important elements to keep it operational:
(1) its vast network of nodes that validate transactions
(2) a mining protocol called proof-of-work (POW), which secures these transactions and ensures that nodes reach agreement on their order
(3) an incentive for nodes to engage in this collaborative process through bitcoin
The blockchain is secure by design due to the decentralized nature of the network. Hackers would have to attack countless computers on the network simultaneously to create falsified confirmation. This creates a system that is extremely difficult, if not impossible, to hack.
Blockchain’s Use In Finance
Many different industries are using “Blockchain technology” to solve a significant number of problems and challenges. By 2017, there were more than 180 companies using blockchain for cross-border payments, capital raising, digital identity apps, clearance and settlements systems and various other business applications worldwide. As the use of blockchain is expanding in finance sectors and open markets, this revolutionary technology is going to change the world as we know it today.
We can use blockchain not just to store records and bank statements, but virtually any type of data. This means that tomorrow, more than 90% of the world’s data will be on blockchains. Another feature that is inherent to Blockchain technology, and is what makes it so secure, is its distributed nature.