What do you mean by Blockchain Technology?
Blockchain technology eliminates the requirement for a trusted group to facilitate digital relationships and is the backbone of cryptocurrencies.
Blockchain is a type of ledger technology that holds and records data.
Blockchain is the buzzword that seems to dominate any discussion about the future of technology, from the capacity of cryptocurrencies to new forms of cybersecurity. While the applications for the technology seem unlimited, not multiple people are entirely sure what the Blockchain is.
In the old days, transactions were tracked in written ledgers and reserved in financial institutions. Conventional ledgers could be audited, but only by those with privileged access. Blockchain took these ideas and democratized them by removing the secrecy around how information– namely transaction data – was handled.
What does a blockchain look like?
A Blockchain can be cracked down into components: The block and the chain.
A block is a collection of data that is connected to other blocks chronologically in a virtual chain. You can think of a Blockchain as a train consisting of multiple carriages linked in a line, where each carriage contains an amount of data. Just like in a real-life train carriage, blocks can fit a fixed amount of data before they are full.
Each block also contains a timestamp, and so it’s clear when the data was stored recorded – something that’s vital for things like transaction or supply chain data where knowing exactly when a price or package was processed is important.
How many copies are there?
There is not even one master copy of a Blockchain Rather, every person who operates a computer that contributes to the network – also known as a “node” – maintains their own copy of the blockchain, and regularly checks with other nodes to make sure everyone has the same record of data. By having each individual contributor store their own copy, it means there is no single point of loss.
How is data added to a blockchain?
Beyond being transparent with data, the blockchain is also a safe way to reserve it. Let’s use Bitcoin as an example, here’s how a transaction is added to a new block:
When a Bitcoin user transmits a transaction, a message is created with both the sender’s and the receiver’s public addresses and the amount being transacted. The sender takes these details, adds their private key to the mix and then creates a hash of it (turns it into a fixed-length code.) This makes a digital signature to confirm the person who owns the amount of Bitcoin(BTC)intends to send it to the receiver.
Other blockchain technology use cases
The Blockchain removes the requirement for intermediaries like banks. The peer-to-peer (p2p)network cuts out the middleman and allows transactions to be protected, cutting down on prices, and can be checked by anyone.
Beyond being utilized for finances, Blockchain technology has multiple other functions. Hospitals are integrating the blockchain to help track medical record data and improve their precision. Agricultural firms use it logistically to follow the supply chain of food.
Smart contracts trust it to keep a record of all agreements and state changes. Once more, it has become a means to sell, trade, and authenticate original digital pieces of art.