What is Blockchain?

So, what exactly is Blockchain!

This term- “Blockchain” what does it mean. What comes in your mind the moment you see the word Blockchain? Many will say, Bitcoin, Ethreum and many digital coins. This articles seeks to answer these questions.Tag along!

Blockchain technology is a structure that stores transactional records, also known as the  block, of the public in several databases, known as the “chain,” in a network connected through peer-to-peer nodes. Typically, this storage is referred to as a ‘digital ledger.

Let’s look at what makes Blockchain special and Unique.

While any conventional database can store this sort of information, Blockchain is unique in that it’s totally decentralized. Rather than being maintained in one location, by a centralized administrator—think of an Excel spreadsheet or a bank database—many identical copies of a Blockchain database are held on multiple computers spread out across a network. These individual computers are referred to as nodes.

How does Blockchain Technology work?

Suppose you are transferring money to your family or friends from your bank account. You would log in to online banking and transfer the amount to the other person using their account number. When the transaction is done, your bank updates the transaction records. It seems simple enough, right?

There is a potential issue which most of us neglect.These types of transactions can be tampered with very quickly. People who are familiar with this truth are often wary of using these types of transactions, hence the evolution of third-party payment applications in recent years. But this vulnerability is essentially why Blockchain technology was created.

Technologically, Blockchain is a digital ledger that is gaining a lot of attention and traction recently. But why has it become so popular? Well, let’s dig into it to fathom the whole concept.

Record keeping of data and transactions are a crucial part of the business. Often, this information is handled in house or passed through a third party like brokers, bankers, or lawyers increasing time, cost, or both on the business. Fortunately, Blockchain avoids this long process and facilitates the faster movement of the transaction, thereby saving both time and money. 

The Blockchain Technology does this by use of 3 main technologies.

1. Blocks Every chain consists of multiple blocks and each block has three basic elements:The data in the block.A 32-bit whole number called a nonce. The nonce is randomly generated when a block is created, which then generates a block header hash. The hash is a 256-bit number wedded to the nonce. It must start with a huge number of zeroes (i.e., be extremely small).
2. Miners create new blocks on the chain through a process called mining.In a Blockchain every block has its own unique nonce and hash, but also references the hash of the previous block in the chain, so mining a block isn't easy, especially on large chains.Making a change to any block earlier in the chain requires re-mining not just the block with the change, but all of the blocks that come after. This is why it's extremely difficult to manipulate Blockchain technology. Think of it as "safety in math" since finding golden nonces requires an enormous amount of time and computing power.When a block is successfully mined, the change is accepted by all of the nodes on the network and the miner is rewarded financially.
3. Nodes :One of the most important concepts in Blockchain technology is decentralization. No one computer or organization can own the chain. Instead, it is a distributed ledger via the nodes connected to the chain. Nodes can be any kind of electronic device that maintains copies of the Blockchain and keeps the network functioning. Every node has its own copy of the Blockchain and the network must algorithmically approve any newly mined block for the chain to be updated, trusted and verified. Since Blockchain is transparent, every action in the ledger can be easily checked and viewed. Each participant is given a unique alphanumeric identification number that shows their transactions.Combining public information with a system of checks-and-balances helps the Blockchain maintain integrity and creates trust among users.

Essentially, Blockchain can be thought of as the scalability of trust via technology.  Blockchain also has potential applications far beyond bitcoin and cryptocurrency.

While Blockchain is most famous for its role in facilitating the rise of digital currencies over the past several years, there are also many other non-cryptocurrency uses for this technology. Indeed, some Blockchain proponents believe that the technology could far outpace cryptocurrencies themselves in terms of its overall impact, and that the real potential of Blockchain is only just now being discovered.At present, many governments, financial sectors, Logistics and Insurance industries are researching and testing the different ways they can use the Blockchain technology. Lately, we are seeing the Chinese digital yuan.In Summary, Blockchain is the technology, Digital currency is a product of what the technology can do.We can only expect more innovation from what this technology can do now and in the future.