What is blockchain technology?

 

 

Blockchain sounds like a buzz word these days, but yet many from us are still not conscious about blockchain and what it is actually about.

 

In 1991 Stuart Haber worked and W. Scott Stornetta on the secured chain of blocks. Though the first block chain was conceptualized by Satoshi Nakamoto in 2008.

 

Blockchain is also knowns as cryptocurrency because it work as an medium of exchanging the identities and hash functions secure the identities. Although it is still a mystery that what is blockchain?  Blockchain is nothing but it is a lost of records which can also be called as blocks that are linked with cryptography. Cryptography is a technique to secure the messages while transmitting from one device or system to another. In the world of frauds, hackers and crime- security of crucial data and information has become a priority because losing some data can be dangerous for a company or organization. So big companies and organizations have separate security panel which encrypt the data to be send to some other parties. While encrypting the data a key value is used which encrypts the data and with the same key value the opposite party can decrypt the message or data. This is how a data can be transmitted securely over the network.

Similarly blockchain uses private key cryptography and hash functions to secure identities. However blockchain is distributed ledger which is used to record the transaction between two parties and their details are being stored on multiple places at the same time, like their replicate data has been done for more security.

Well the most successful application of blockchain is being – Bitcoin. Blockchain basically runs bitcoin. If you look back to past then we have suffered many problems in the banking systems, like the bank charges huge transaction fees and the fake currencies generates the issue of double-spending. Therefore, the digital wallets and applications like- Paytm, PayPal, Google pay and etc. solve these issues very well by allowing instant transactions but still waits for the bank to response. However bitcoin solves these issues very well, it is digital payment system which runs over the blockchain technology and though bitcoin has the most crucial feature which do not charge any transaction fee and all the transactions are done just within few minutes. With the introduction to blockchain technology the hacking problems are running away just because due to the structure of blockchain it makes it impossible to hack a person’s blockchain network.

Blockchain is a public distributed database which is embracing encoded ledgers that simply means a block is a current part of blockchain which summarizes the recent transactions and once it is proved it eventually become a part of blockchain.

 

Working principle of blockchain technology

A blockchain carries no transaction fees. The blockchain is a simple way of passing information from one party to another in a fully automated and safe manner. One party initiates the transaction process by creating a block, now this block is verified by millions of computers distributed over the internet. The verified block is now added to a chain, which is stored across the network, by this not just a record is created but a unique record with a unique history is created. Ignoring a single record means ignoring the entire chain in millions of instances. Bitcoin uses this model for monetary transactions, but it can be deployed in many different ways.

This is how blockchain technology works.