Over the years, Technology has changed our lives positively or negatively by new inventions and developments which may be the result of our curiosity, creativity and problem solving techniques. So today let’s talk about one of the greatest invention which called BlockChain.
The name BlockChain, originally block and chain is a source of growing list of records, called blocks, which are linked and secured using cryptography. Blockchain Technology is mainly associated with Bitcoin and other Cryptocurrencies.
Are Bitcoin and blockchain the same?
Blockchain isn’t just for Bitcoin.
Bitcoin is a type of digital currency where Blockchain is a technology that is enable to jointly manage the database of those recorded Bitcoin transactions. When Bitcoin was released as open source code, blockchain was wrapped up together with it in the same solution.
For example, in case of Bitcoin, the community uses mining. Proof of work is a protocol by which somebody can effectively prove that they have engaged in a significant amount of computational work. In addition to cryptocurrencies, the technology can prove itself to be of the best interest in other spheres by providing a transparent system, cutting transaction costs, decreasing the risk of deals with third parties, and reducing time for processing.
Previously the money transfer process was like:
So the main problem is there we have to be dependent on a 3rd trusted party. If the bank approves the transaction, many steps needed to complete the transaction. Here comes to Blockchain, there is no need for a trusted third party or intermediary to validate transactions; instead a consensus mechanism is used to agree on the validity of transactions. As Blockchain is shared with everyone they can see what is on the Blockchain, this allows the system to be transparent as blockchain is making to change how people do business by offering trust.
Now the thing is how Blockchain works:
Discussing on the design of Blockchain, we can see that it is inherently resistant to modification of the data. The entire blockchain is retained on this large network of computers, where no one person has control over its history. Each block typically contains with a cryptographic hash of the previous block anything recorded on a blockchain cannot be altered, and there are records of where each asset has been. Blockchain offered a single shared ledger among all parties this can result in simplifying this model with reduced complexity of managing the separate systems maintained by each entity. Every person connected with that centralized place which is basically an open lender can see how much money they have and from where they got the money during transaction.
The main purpose of this component of blockchain technology is to create a secure digital identity reference. Identity is based on possession of a combination of private and public cryptographic keys. Blockchain, which provides a chain of transactions that are usually validated using digital signatures The new transaction is configured into a “block” and is shown online. The network of that block is send to every person present on that chain. Here comes one another source which called Mimers.
Mimers helps to validate the transaction and ensure that it is accurate. Once approved, the block is added to a chain of recorded transactions in a public ledger, the block is then added to the chain which provides a permanent, non-disputable and transparent record of the transaction. Here it requires Key. Each of them holds a private key and a public key. The combination of these keys can be seen as a dexterous form of consent, creating an extremely useful digital signature. By storing data across its network, the blockchain eliminates the risks that come with data being held centrally.
Blocks are contents with Data and Hash of previous blocks. The structure of data like: From The person the amount is received, then To the person amount goes and the hoe much amount goes. Then comes to Hash. Let’s take a quick look on Hash:
Blockchain contents with Open lender as well as Distributed Lender where the centralized network can be distributed to so many networking zone. Open blockchains are more user-friendly than some traditional ownership records, which, while open to the public, still require physical access to view.
The great advantage to an open, permissionless, or public, blockchain network is that guarding against bad actors is not required and no access control is needed. This technology responds very well to the unauthorized changes or malicious tampering.
The Blockchain technology responds very well to the unauthorized changes. With all transactions being added to a single public ledger, it reduces the clutter and complications of multiple ledgers.
A smart contract in blockchain is a computer protocol intended to digitally facilitate, verify, or enforce the negotiation or performance of a contract. Smart contracts allow the performance of credible transactions without third parties.
The Potentiality of Blockchain is immense and there should not be any doubt on that. It empowers users, helps in transparent and faster transaction. It provides consistent, timely and accurate data as well. But the question is how quickly we and the policy makers build trust on this.