What is Blockchain and How does it Work?
Blockchain technology is about to change our IT industry in the same way that open-source software did a decade ago. And just as Linux has been the core of modern application development for almost a decade, in the same way, Blockchain is also going to be a great way to share information in the coming times, and which will be lower cost and easier to implement. Can be done between open and private networks.
But a lot of hype was generated among the people regarding Blockchain Technology, because they felt that it could completely change the technology of our future. This thing is also true to a great extent, but speaking like this will not make sense, rather we have to understand Blockchain Technology completely, we have to think about its different aspects, somewhere else we can make it better than existing technology.
It is true that the pace of adopting Blockchain is very slow, but technology experts believe that this pace is going to increase gradually in the coming times, which is a good news for us. In future, this technology is going to change the whole world.
What is Blockchain?
We can call blockchain a chain of different blocks, information is hidden in these blocks. The purpose of using blockchain is to time stamp digital documents so that they cannot be backdated or tampered with. The technology of blockchain can also get rid of the problem of two records without using a central server.
Using blockchain technology, money, property, agreements, etc. can be easily exchanged without the need for the mediation of a bank, government, or any third party. The specialty of this technology is that once any data is recorded inside a blockchain, it becomes not only difficult but almost impossible to change it.
How does Blockchain Work?
Blockchain technology is a system based and working on blocks. Blocks contain user information and transaction history, let’s say there are 3 blocks, these three blocks are linked to each other, all three have hashes. If any block is changed, then other blocks get to know the changes, millions of billions of hashes are calculated by the computer within a few seconds.
Blockchain is also called Proof of Work. The blockchain prepares a list of all the work done by the computer and stores it with itself. If a user does a transaction, by whom the transaction is done and where the transaction is done. Apart from this, the blockchain stores the transaction amount inside the block, the database of the block can be seen and read when needed.
History of Blockchain
The blockchain technology was invented by Satoshi Nakamoto in the year 2008. Satoshi Nakamoto was the first person who also invented bitcoin. Satoshi Nakamoto also invented bitcoin, he created blockchain technology to keep records of bitcoin transactions.
The purpose behind the invention of Nakamoto’s blockchain was that he wanted to create a decentralized digital ledger which is not controlled by any third party such as government or bank and the public can control their own money.
Advantage of Blockchain
So let us now discuss about the benefits of Blockchain technology in the next post –
- With the help of blockchain technology, you can transact without the permission of any third party.
- Once the data is saved, it is difficult to manipulate the data.
- Blockchain technology can be considered secure as compared to other technology, because hacking it is not such an easy task.
Disadvantages of Blockchain
There are also some disadvantages of blockchain technology, about which we have also told you below-
- The functioning of blockchain technology is very complex and it is very difficult for a common user to understand it.
- Electricity consumption is very high in blockchain technology, because thousands – millions of computers work on data in real time.
- Transactions in blockchain technology are done with the help of all computers connected to the network, there is no role of the government in this, so there is a possibility of fraud.
What is the Difference Between Bitcoin and Blockchain?
There is a difference of land and sky between both Blockchain Technology and Bitcoin. That is, both are completely different. Actually, blockchain is a technology, a platform where not only digital currency but anything can be made digital and its record can be kept. That is, blockchain is a digital ledger.
At the same time, Bitcoin is a digital medium, through which some things can be sold and bought. Although it is wrong to call it currency, because it has no value in the real world. Kshitij adds that however, bitcoin is just one example of a cryptocurrency; Other cryptocurrency networks are also powered by blockchain technology.
Future of Blockchain Technology
The blockchain is a cryptocurrency market of over $200 billion. But the success or failure of bitcoin or any other cryptocurrency will not decide the future of blockchain. Blockchain is bigger than cryptocurrency.
Some Notable changes in the blockchain ecosystem are as follows:
In 2016, blockchain attracted $1.4 billion in investment, as reported by PwC. In 2016, the government of Dubai announced that it would transfer all of its supply chains to blockchain by 2020.
Recently, Ethereum established EEA- Ethereum Enterprise Alliance and IBM is working on Hyperledger.
More than fifty of the world’s leading financial firms are experimenting with blockchain.
In addition to all this, blockchain solutions are being discussed in industries such as automobiles, identity management, intellectual property rights, real estate, healthcare, supply chain management, and governance.