Decoding Block Chain
Understanding blockchain and what makes it so revolutionary
These days wherever we go, we hear companies talking about blockchain or investing in it and how it is the next big thing. Blockchain these days is used basically to manage cryptocurrencies. It keeps a record of all data exchanges and this record is known as a ledger and each data exchange is called a transaction. Here we are going to look into a few details of blockchain.
What is Blockchain?
In layman’s terms, blockchain is a time-stamped series of an immutable record of data that is managed by a cluster of computers, not necessarily owned by a single entity. Every single block of data is secured and bound to each other using cryptographic principles.
How does blockchain work?
Blockchain is a simple way of passing information from person A to person B. It is fully automated and a safe way to do transactions and this is how it works. Person A initiates the process by creating a block. This block which has been created is verified by thousands and lakhs of computers that have been distributed around the net. Then the verified block is added to a chain, which is stored across the net, creates a unique record with a unique history. Giving wrong information would mean falsifying the entire chain in millions of instances, and this is virtually impossible, hence blockchain is a very safe way to do transactions. This model is used by bitcoin, but it can be used in many other ways as well.
What makes blockchain special?
One of the primary reasons why the blockchain is increasingly becoming popular is because of the fact that there is no central authority. Because it is a shared and fixed ledger, the information it has is open for anyone and everyone to see. So by that principle, anything that is on the blockchain is transparent and all those who are involved are held accountable.
Why is Blockchain gaining popularity?
There are three main reasons why the blockchain has gained immense popularity in the past few years.
Decentralization: In a decentralized entity such as blockchain, the information is stored by not just one entity, but several entities.
Transparency: Another reason why the blockchain has gained tremendous popularity is the fact that it is transparent in nature. One is able to see all the transactions done by a person or a company, however, the identity of the person is not revealed (speaking in terms of bitcoin). For example, if a person knows the public address of any of the big companies, then one can simply search it on the net and see the transaction history. This forces the companies to be honest in revealing their transactions.
Immutability: One of the biggest advantages of the blockchain is that it is immutable. This means that once any information has been entered into the blockchain, that piece of information cannot be tampered with.
The final verdict on the blockchain is that it is a revolutionary piece of technology, which if put in use, will change the way the world functions today. Its three pillars; decentralization, transparency, and immutability is something which will appeal to many, as these features have not been witnessed so far on a large scale.