What is Blockchain Technology?
Have you ever thought if there is an easier way to complete transactions without having a deal with online wallets, banks and third-party applications? Well, it’s possible due to BlockChain.
We are here to know everything about Blockchain technology, Without any further ado let’s get straight to it.
What is block chain Technology?
The name ‘Blockchain’ seems to be a bit complicated, but the core concept of Blockchain technology is quite simple. It is a type of database. To get a clear understanding of BlockChain you must first understand what a database is.
The collection of information to be stored electronically on a digital system or computer system is known as a Database. The vast database stores the housing data on servers which are made of powerful computers.
We are very aware that many ways of a bank transaction could fail due to technical issues of their accounts, solutions to the problems of cash and online payments through banks, and the concept of cryptocurrency came into existence.
A cryptocurrency is a form of digital currency that runs on Blockchain technology. These currencies are immune to counterfeeding and don’t require a central authority.
They are protected by strong and complex encryption algorithms and in a market of more than thousands of cryptocurrencies like Litecoin, Ethereum, and Bitcoin, etc.
Wait, are we just talking about cryptocurrencies and bitcoin right?
Yes, cryptocurrencies are built using Blockchain technology and they are the most well-known uses of tech. It’s very often that you probably heard about these cryptocurrencies recently but they have been booming in the market since 2016.
Here is an example that will make you understand how Blockchain technology is used in virtual money transactions:
Let’s have four friends Jack, Dawn, Mac, and Sam. They went for dinner in a five-star hotel, after they were done Jack paid the bill and all of them decided to split the expense amongst each other. Sam sent two bitcoins to Jack, Dawn sent four bitcoins to Jack, and at last, dawn sent three bitcoins to Jack. All the transaction details between them are permanently inscribed in the block that is created to keep the record. As seen in the below picture:
This block keeps all the records of transactions between one and another person.
Transparency in Blockchain Technology
Blockchain is a decentralized way of virtual transaction, all the transactions can be transparently viewed by any of the two individuals. Each node has its copy of China that gets updated as a fresh block.
Transparency between the exchanges is entirely encrypted, the transaction can be easily tracked if someone is willing to steal these data.
Is Blockchain secure?
This technology claims the Best security and encryption in several ways. As it stores the data in first out form, after a Block has been added to the end of the blockchain, it is very difficult to find out the contents done previously unless a majority of permissions are granted to do so.
Here’s why that is important to security?. If a hacker wants to alter the Blockchain and steal bitcoin from everyone in the virtual market. an individual’s blocks are also altered at the same time and they will get the update if hackers try to steal the information.
How Blockchain technology is used?
As we know now, cryptocurrencies use Blockchain technology to store data transactions. But some of the companies and sectors also use Blockchain that includes Walmart, P freezer, AIG, and a host of others.
Using Blockchain technology gives a brand and ability to track the route of a product from its origin, through it stops it goes, and finally it’s delivery to the consumer. If the product is found to be contaminated then it can be traced or tracked along by the consumer.
Banking and finance:
By implementing Blockchain into banks, customers can see their transactions processed within minutes and days. By using blockchain technology, banks get the opportunity to trade funds between institutions more efficiently and securely.
Cryptocurrencies like bitcoin soon become the nation’s currency and can be under the central authority system for some foreign countries.
If you are updated regarding the bitcoin news, El Salvador on this previous Tuesday became the first country in the world to adopt bitcoin as a legal tender allowing all the citizens to buy a cup of coffee, get a haircut or even pay taxes and home loans in the form of cryptocurrency.
Advantages of Blockchain
● Accuracy of the Block: a network of thousands of computers is there to supervise the transaction. Human involvement in the verification process is reduced, resulting in fewer errors and inaccurate records of information.
● Cost reduction: Unnecessary fees are eliminated with the use of Blockchain. As whenever we make payments using credit cards or debit cards, the bank charges some fees for approval.
● Efficient transactions: Transaction placed through this Blockchain technology settles within the day whereas in the case of banks it can take up to few days to settle.
● Secure transaction: Authentication after the transaction is verified by the Blockchain network. Thousands of computers on this technology are deployed to confirm the details of exchanges are correct. This discrepancy makes it extremely difficult for the important information on the Blockchain to be altered without notice.
Disadvantages of Blockchain
While having a look at advantages we must also know the challenges to its adoption. Here are some of the disadvantages standing in the path of widespread blockchain adoption.
● Technology cost: Although Blockchain saves users money on transaction fees, in the real world what is the cost of mining bitcoin, users continue to drive up their electric bills in order to validate injection on Blockchain.
● Speed in-efficiency: The transactions per second(TPS) rate estimated in the Blockchain network is very low. It proves the inefficiency of the blockchain.
● Illegal activity: As per the security on the blockchain network, it protects users from hacks and preserves privacy. But it also allows for illegal trading and activity on the blockchain network. platform used for illicit transactions in an online marketplace in the “dark web”. This system can be seen as both a pro and a con for this technology.
Not to stretch more, let’s conclude the whole story and concepts of Blockchain technology.
These were all the basic concepts and usage of blockchain technology in the real world, If you can think of any others let us know in the comments section down below. More ever don’t forget to share your feedback for the content in the comment section.