What Is Blockchain Technology? Definition
A blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record financial transactions and virtually everything of value. On the other hand, a blockchain can also be referred to as a digitized, decentralized and public ledger of all cryptocurrency transactions.
In fact, as a blockchain grows, the most recent transactions are recorded and added to it in chronological order in-order to allow market participants keep track of digital currency transactions without central recordkeeping. Additionally, each node or computer connected to the network gets a copy of the blockchain which can be downloaded automatically. Likewise, blockchains were originally developed as an accounting-method for a virtual-currency called Bitcoin but today blockchains that use distributed ledger technology (DLT) are being used in various commercial applications. Currently, the distributed ledger technology (DLT) is primarily used to verify transactions within digital currencies although it’s also possible to digitize, code and insert any document into a blockchain.
All in all, the information held on a blockchain exists as a shared and continually reconciled database which implies that the records kept in a blockchain-database are public and easily verifiable. Lastly, by storing blocks of information that are identical across a network, a blockchain cannot be controlled by any single entity and it has no single point of failure.
Who Uses A Blockchain?
Today, the finance-sector offers the strongest use cases for the blockchain-technology. For example, World Bank made over $430 billion money-transfers in 2015 using blockchain-technology. In fact, blockchain helps to cut-out middleman for such types of transactions thus saving receivers and senders a lot of money.
On the other hand, at the moment there is a high demand for blockchain developers because of the need for new secure transfer Apps and even online-transactions are closely connected to the processes of identity verification which can greatly be achieved through blockchains. All in all, with blockchains online identity and reputation will become decentralized thus allowing people to own data that belongs to them.
Distributed Databases and Blockchains:
A distributed database is like a spreadsheet that is duplicated thousands of times across a network of computers with a network is designed to regularly update this spreadsheet. In fact, all the information held on a blockchain exists as a shared and continually reconciled database which makes it truly public and easily verifiable.
Blockchain technology is built-in robustness whereby blocks of information stored are identical across the entire network hence allowing a blockchain not to be controlled by a single entity and without a single point of failure. For example, Bitcoin which was invented in 2008 has been operating without significant disruption since that time and the only problems affecting this platform come from bad intention and human error not flaws in the underlying concepts. In fact, transparency data is embedded within the network as a whole and it cannot be corrupted by altering any unit of information on the blockchain because it will require you to use a huge amount of computing power to override an entire network. All in all, blockchain solves the problem of manipulation.
Network-Nodes and Blockchains:
A network of computing-nodes makes up a blockchain. In fact, computers are connected to a blockchain network using a client that performs the task of validating and relaying transactions and then gets a copy of the blockchain that gets downloaded automatically upon joining a blockchain network. Additionally, every node is an administrator of the blockchain and it joins the network voluntarily. All in all, these nodes work together to create a powerful second-level network.
Blockchains and Decentralization:
A blockchain is a decentralized technology whereby anything that happens to it is a function of the network as a whole. For example, a global network of computers uses blockchain-technology to jointly manage the database that records Bitcoin transactions.
Blockchains and Security:
A blockchain eliminates the risks that come with data being held centrally by simply storing data across its network. In fact, a blockchain network lacks centralized points of vulnerability that computer hackers can exploit. Additionally, blockchain security methods use encryption technology which helps to eliminate data-corruption and hacker invasions
Blockchain technology provides the ability to create businesses and operations that are both flexible and secure. In fact, if companies succeed in deploying blockchain technology creating products and services, then consumers will also trust and adapt to them. Additionally, blockchain-technology is an opportunity that investors should watch out for because the demand for blockchain-based services is on the rise and this technology is actually advancing at a rapid pace. Lastly, the potential applications for blockchain technology are limitless and consumers are about to see different blockchain DLT services and products becoming more mainstream in the nearby future.