BlockChain Technology: What it is and how it works?

BlockChain Technology: What it is and how it works?

In today's online world,  where everything has become digital and also a very important part of everyone's lives, where one single day can't go without doing a transaction, it becomes very necessary to have such platforms that are very trusted and secure. At such time, we all needed a trusted and secure platform and blockchain was developed. Blockchain is an answer to all the problems we have in this digital world. It is used for safeguarding our data, full proper verification, and more such issues being solved by this. In this article, we will talk about what blockchain technology actually is and how it works!

What is blockchain technology?

Blockchain technology is a rising sector in information technology. Blockchain technology is used for recording data of past transactions that have taken place. This data is able to be stored in various different places, and you can see them whenever you want to. It is even called a public ledger. It also updates the data by itself at proper intervals of time. A copy is kept with all the ledgers so they pass and there are no chances of failure.

Blockchain is also considered a base of data, but it is not exactly a conventional database. These all computers are digitally chained together and data is stored digitally rather than stored in rows, columns, or tables. The data is stored in blocks. These blocks are attached to each other.

The blockchain is not controlled by one central authority or head, it is run online, digitally. It is not a computer like in the past but it is a people-to-people chain of networks.

The blockchain was first successfully used for Cryptocurrency bitcoin. Cryptocurrency assets successfully use the blockchain network. First, only Cryptocurrency would be able to use blockchain networks, now there is an expanded variety of apps that can use blockchain. Blockchain technology is a base for online currency exchange. It is also used for safeguarding the legal rules for protecting legal properties.

A large variety of information is stored on blockchain technology but it is widely used as a ledger. Data on blockchain can't be changed, once data is entered it is irreversible. It is shared between nodes of the computer network. Blockchain also created cryptocurrencies like Decentralized finance applications, Non-fungible tokens, and smart contracts. Each block in the blockchain shows a collection of transactions that took place. The transactions arranged in a proper order are not jumbled so it becomes easy for the user to look at the past transaction he has made.

How does the blockchain work?

There are complex mechanisms such as proof of work & proof of stake. Blockchain technology does not have a central authority to control it and this is its unique quality. The transactions that take place are validated by all the members of the network and only after validation is done, transactions happen.

• Proof of work People solve the complex math issues and proof of stake member chosen basis of the amount of Cryptocurrency that is being held by all the members. Then, the verification of transactions is done, once a member starts the transaction it is informed to the network. Nodes in the network start to check the authenticity of the person starting the transaction. And if the person has all the documents and credentials required then only the transaction is taken further. If the transaction is verified by the nodes then transactions combine with other books and form a new block.

• After verification, the process of encryption takes place. This process is done to ensure that the user's information remains safe and secure.
• As and after one block is created the consensus machine has to agree on the validity of it. After the validity is received, the block is added to the blockchain and it becomes a permanent part of the ledger of blockchain technology.
• After this more blocks get added to the chain, due to which the data becomes very strong, and if someone wishes to change something in any one of the blocks then that person will have to open every block and that is difficult.
• Along with transactions, smart contracts are also a thing which is done by blockchain technology. Smart contracts are nothing but contracts that are completed by themselves on the predetermined terms of the code. Blockchain is a little similar to spreadsheets but the difference is the way they are designed and accessed.
• Blockchain has a program called scripts in which tasks like databases are done. Also once, a block is closed then that transaction is completed. But for a transaction to complete five more blocks have to validate itself. This full process takes about one hour. Also, not every blockchain follows this process for example Ethereum and the blocks that do not use this process take very little time than the one that follows this full process, for example, Bitcoin follows this long process.
• Also, as blockchain technology is a technology that is not controlled by a centralized authority it becomes a very transparent place for transactions to be done and the address of wallets are available on this blockchain. But also in the blockchain, only the person who has authorized an address can reveal it. So in blockchain technology members remain unknown along with the feature of transparency.
• At present, thousands of systems are looking to incorporate blockchain technology in their systems. Currently, more than twenty thousand Cryptocurrency systems are running on blockchain technology. The banking system has the most benefit from this blockchain technology. By using blockchain technology the transactions which will take days to complete can be done within a few seconds with the help of blockchain technology. Blockchain technology is also useful for the healthcare sector keeping records, useful in the voting process.
• Also, no third party is involved in this technology and this helps in cost reduction, the countries or cities with no developed governments have access to the technology, due to which citizens of those countries can avail facilities of this amazing technology. And as there is no involvement of people there is a high accuracy in blockchain technology.
• The speed of transactions is low per second, and there are also chances of scams taking place which lead to huge losses for people, Users can only store limited data with no place for unlimited storage of data available.
• Blockchain technology has been proven right by thousands of computers. The process of verification is removed, due to which the error caused by humans gets removed. It removes the need for a third person. The information in this technology is not stored in a particular central place, not one person can control it. The data this blockchain has cannot be seen by anyone except the person who is given the address. The transactions on it are very secure. This is open-source software that implies that anyone can view the code of the blockchain technology.

Conclusion

With the help of blockchain technology, one gets a shift in the way they organize and manage things. One can avail the safety and security of the technology. Its unique feature of not having a central authority reduces the need for third-person participation in the process of this technology. Blockchain makes the world for people easier. The government is helped as this technology provides more correct, transparent information and data. Blockchain has made its name in this market. It has become very useful for cryptocurrencies like bitcoin. This technology will become the future of many big companies in the world. It is the best platform for storing data in an organized way. Blockchain technology is the future of many companies. Next few years, blockchain will grow on a large scale and it will become one of the most important technologies.

It is not controlled by any central authority, and mixed with the security of cryptography and its visible mechanisms offers a wonderful way to build trust in the digital world. As industries continue to find their applications, blockchain's transformative potential is only beginning to unfold, promising a future where transparency, security, and efficiency go hand in hand with cryptocurrency news.

FAQ’s

Q: Explain blockchain technology in simple language.

A: In simple language, blockchain technology is a ledger that stores the data of transactions taken place in the past.

Q: How many number of blockchains are available?

A: There are around twenty thousand blockchains at present times.

Q: How many varieties of blockchain are there?

A: There are two varieties of blockchain, they are: private blockchain and public blockchain.

Q: What do you mean by private blockchain?

A: A private blockchain is a blockchain that needs permission before making any transactions.

Q: What do you mean by public blockchain?

A: Public blockchain means the blockchain which does not need any permission.

Q: Does blockchain have any security measures taken?

A: Blockchain is a very secure platform.

Q: Is blockchain data able to change?

A: Blockchain data can change but it is very difficult to change because many blocks are attached to this chain.

Q: Which difference is there between blockchain technology and the traditional bases of the data?

A: The traditional bases of data have a central authority that controls it while blockchain technology does not have a centralized authority to control it.