What is Blockchain?
After all the talks about Bitcoin and different cryptocurrencies in the last year, Blockchain is the topic of the moment. I won’t say Blockchain is the future, but it can help you get transparency in the working. If you too want to know what Blockchain is, read this brief introductory guide about this technology behind Bitcoin.
The Blockchain technology powers the Bitcoin, and however technical the name sounds, it’s easy to understand. Moreover, the Bitcoin Blockchain has its use, even outside the world of virtual currency, in many real-world applications. So, check how Blockchain works.
What is the Blockchain?
The inventor of Bitcoin introduced a distributed system of transaction records and termed it the Blockchain. It is a ledger of Bitcoin transactions stored across devices instead of a central server. Any Bitcoin operation ever happened is permanent there, and no one can change it.
Every peer (users connected to the network) keep their copy of this decentralised ledger. And when a new transaction takes place, their copy gets updated. What about authentication and what if someone tries to edit and change the values?
We will see it next.
How does Blockchain work?
Since the Blockchain ledger is a public ledger, anyone can see and verify any transaction. When new Bitcoin transfers take place, the users have to solve complex algorithm to validate the transactions. And once one of the users confirm it, the block of transactions is added to the ledger.
Each block is linked to the previous one, and you can trace a Bitcoin all the way up to the time when it came into existence. And if someone tries to change the values, they would have to hack into all the machines connected to the network. Not only that, they have to update the copies before someone adds a new block.
It’s like one racing against the whole world and the time is limited. Moreover, the distributed control makes the system fast and getting updated in real-time. It’s a system controlled by users, for users and can be useful at many places like voting and medical record keeping.
How is Blockchain better?
It’s not because Blockchain is new, we have to use it for better results. It has got certain benefits over the current processing system.
The Blockchain is decentralised; it doesn’t have any central control. Users are in power, and the cryptographs keep it secured. And the absence of a centralised server keeps the system safe from mass attacks.
Moreover, presence of many processing hubs instead of a single server ensures faster delivery. And combined with the direct settlement, the absence of intermediaries also result in minimum costs. Yes, it facilitates end-to-end Bitcoin transactions, or in any other field, you want to use Blockchain.
You can update the system in real-time and instead of a central authority, other users can confirm it. So, you see there are no working hour constraints, and the system gets updated round-the-clock. With the number of users and their transactions growing, the speed may get slowed down in future. But still it wouldn’t be long waiting days for your overseas transfer to pass through.
The system works 24 hours, every day. Last but not the least, everything would be transparent in the records. Anyone can check if they feel something is wrong.
Bringing Blockchain in the Real world
Apart from the world of Bitcoins (and other cryptocurrencies), Blockchain has endless possibilities in easing our daily life.
Imagine not carrying your medical records everywhere. You can give your doctor a number, sort of a ledger entry, and he can take out your medical history, previous checkups, medicines and all. The doctor/hospital can then also add new entries to it with a valid password like thing.
Another of its use can be found in the delivery system. Anyone can check the status in real-time where the parcel is irrespective of country borders. The Blockchain is available across computers and can be easily updated. Think it to be like a spreadsheet where you get the status in detail.
Schools can share students’ update and feedback with parents. The government can make their progress transparent, and as for financial systems, banks are already working on an open but secure system.
What do you think about the Blockchain system? Let me know in the comments.
Submitted by: Abhijeet Kumar
Although I completed my post-graduation in Computer Applications, I started looking for a career in content writing. Apart from posting guides and reviews on blogs, I work as a part-time freelancer at Upwork. Connect with me on LinkedIn, always available if not asleep.