Blockchain Technology – Everything you need to know
Blockchain is a system of recording information. It is done in a way that makes it difficult or almost next to impossible to change, hack, or cheat the system. These are also some of the main reasons why Blockchain technology has blown up so much over time.
The blockchain is essentially a digital ledger of transactions. These transactions are in turn duplicated and distributed across the entire network of computer systems on the blockchain
Comparing Blockchain to an Excel Sheet
Imagine a Microsoft Excel Sheet file on one’s laptop. They are bound to have the details of some transactions that were previously made via them. This can be called a ledger.
Now, imagine further that the Excel Sheet file is copied to hundreds of people and their computers which are connected all the while forming a network. The ledger in the initial individual’s laptop has now been established as a distributed ledger.
Blockchain technology has proven to be a tremendous invention because it constantly helps Excel to improve and evolve every time transactions are made.
Why is there so much hype revolving around blockchain technology?
There have been many attempts to create digital money in the past, but sadly all of these ventures have either failed or haven’t been able to make a significant amount of profit.
The prevailing issue that prohibited their success was trust. Just because someone curates any sort of digital currency, doesn’t mean that they are trustworthy. This is where Bitcoin comes in. Bitcoin was designed to solve this problem by using a specific type of database.
This database was called a blockchain. Most normal databases, such as an SQL database, have someone in charge who can change the entries hence making a major hindrance to privacy and trust. But blockchain is different because nobody is given the charge. It runs by the people who are in charge of using it. What’s more is that bitcoins can’t be faked, hacked or even double-spent – this is how it built trust among its users.
Who invented blockchain technology?
Blockchain technology was invented by Satoshi Nakamoto. This was back in the year 2008. Blockchain was used to be a part of the cryptocurrency bitcoin, as its public transaction ledger. Satoshi Nakamoto’s aim in creating the decentralized Bitcoin ledger—the blockchain—was to give complete power of an individual’s money to the individual.
This allowed users to control their own money so that no third party, not even the government, was ever capable of accessing the money least be able to monitor or utilize them.
But mysteriously, the creator of Bitcoin, Satoshi, disappeared back in 2011. What he left behind was an open-source software that the users of Bitcoin could update and improve. Blockchain was monumental as it helped to erase the problem of double-spending problems, without the need for a trusted central authority or central server.
The bitcoin design later went on to serve as an inspiration for other applications.
What is the need for blockchain technology?
Blockchain Technology prevents missed transactions, human or machine errors, or an exchange that was not done with the consent of the parties involved. The most critical area where Blockchain helps is by guaranteeing the validity of a transaction. It does this by recording it.
Unlike other applications, it not only records the transactions on the main register but also registers them to a connected distributed system of registers. All of these are connected through a secure validation mechanism.
Areas where blockchain Technology can find its usage :
- Smart contracts – Any industry heavily relies on its widely spread contracts. Some of these well-known contracts come through insurance, financial institutions, real estate, construction, entertainment, and law. people would benefit from blockchain’s indisputable ways. These ways are used to modify the experience while updating, managing, tracking and securing contracts. These tasks are executed without the involvement of an intermediary, also use blockchain technology.
- Supply chain management – Whenever the value changes hands or there is a visible status of asset changes, blockchain is ideally suited as it manages the process effortlessly.
- Asset protection – whatever your profession is, asset protection is very crucial. Blockchain technology can help you protect your assets. They do this by creating an indisputable record of real-time ownership.
- Crowdfunding – Say goodbye to traditional crowdfunding. With blockchain-powered crowdfunding campaigns, the investments for a new project are more genuine and are from an interested community.
Blockchain technology – opportunities and advantages.
- The blockchain allows one’s smart devices to communicate with each other better and faster.
- Blockchain solves the problem of manipulation hence helping its users to gain an unadulterated amount of trust.
- Online identity and reputation shall tend to get more decentralized. We will own the data that belongs to us without unnecessary interference.
- Cryptocurrencies take the power away from governments. This prohibits them to control the value of currencies and hand it to people or simply snatch it away.