Blockchain technology is a decentralised, distributed ledger that helps in maintaining the record of all the digital asset or transaction. Its design is inherent and cannot be modified that makes it appropriate for industries such as cybersecurity, healthcare and mainly the payment or financial sector.
In other words, blockchain technology is just like a database where it keeps the record of all the transactions that took place in a system. Blockchain differs from the typical database in the way it stores information. It refers to a specific type of database that uses a decentralised method to record transactions.
Blockchain stores data in chained blocks. This chain is created in chronological order as after one block is filled with data it is chained onto the previous one. In this article, we will try to cover some aspects of blockchain technology and the information that you should know about it.
What do you mean by Blockchain?
Blockchain technology is a decentralised database, which records data in blocks that are chained together.
When we talk about a database, then you should know that it is a collection of data, which is recorded systematically on a computer system. Data in databases is usually structured in table format to enable better search and filtration for a specific piece of data.
Many businesses need to keep all the transactions and information safely. So, this information is usually handled by a house team or passed by third party holders like bankers, lawyers and brokers.
These mediators increase the time cost or both for the business. However, blockchain technology eliminates this long process and makes transactions faster and less time-consuming.
The decentralised blockchains are fixed which means you cannot change the data you have entered into it. In the case of Bitcoins, the transactions are recorded permanently and anyone can view them.
What makes Blockchain technology more popular?
Various reasons make Blockchain technology more popular. Some of the reasons behind the popularity of blockchain technology are the rising requirements and increasing popularity of bitcoins. You must have heard about bitcoins that are a kind of digital currency, which is best on blockchain technology. Though, blockchain technology can be utilized all over different platforms and industries. Some reasons for this popularity are:
Increased security
Blockchain uses a digital signature feature to initiate transactions, which can avoid frauds, which makes it impossible to alter or change the information of a person by other users without completing the specified digital signature.
Decentralised system
In earlier methods, a person should get approval from authorities like banks to proceed with a transaction. However, by utilising blockchain technology you can initiate a transaction with the mutual consensus of individuals, which further leads to a faster, better, and safer transaction.
The capability of automation
Blockchain technology is a programmable technology and assists in creating systematic events, actions and transactions. These transactions can be only processed after completing the needed criteria to do a payment.
What consist of Blockchain?
Blockchain technology, generally include three important components that are blocks, mining and nodes. We are elaborating these concepts under this head.
Blocks
A block is a place where data is recorded, each chain contains various blocks that are chained together. In a block, there is nonce which is a 32-bit whole number created at the time of block-creation. It also creates a block header hash.
When the first block of a chain is created, a nonce extracts the cryptographic hash. The data in the block is signed and tied to the nonce and hash until it gets mined.
Mining
The process of feeding details about transaction to the public or private Ledger is called mining. The person who adds these details is called a miner. This term is generally related to bitcoin but it is also referred to as other blockchain technologies. Undermining, the hash of a blog transaction is generated that is tough to modify and makes a safer blockchain system.
Nodes
The most important aspect of blockchain technology is decentralisation. The chain in blockchain technology is distributed by nodes, which are connected to the chains. Node is an electronic device, which has copies of blockchain and assists the network to function properly.
This node has its copy of the blockchain and the networks are algorithmically approved by the mined block for the chain to be upgraded, trusted and verified. Due to the transparency offered by blockchain, each transaction is recorded, checked and viewed.
To conclude
The concept of blockchain technology refers to the list of blocks that have been used in cryptocurrencies. It has gained traction with the rising popularity of digital currencies like Bitcoins. It records all the transactions in blocks for a safer and faster payment process.
The market of blockchain technology is surging owing to the aspects like increasing popularity of cryptocurrencies. Though, the stringent rules & regulation by government authorities are restricting the growth of the market over the forecast years.