Blockchain is a decentralized technology that allows people to send and receive cryptocurrencies. No company or organization owns this chain. There is a distributed ledger. It is connected to the chain through an electronic device that maintains copies of the blockchain. It also keeps the network functioning. Blockchain facilitates the process of recording transactions and tracking assets in a business network.
Elements of blockchain
A distributed ledger is a digital system that keeps a record of currency transactions maintained at multiple points throughout a network. It provides access to all the networks participant and its immutable record of transactions. This eliminates duplication. Hence, it records transactions only once. Distributed ledger acts as a central authority to keep a manipulation check.
Immutable records mean records that can not be changed or deleted. Once the transaction has been recorded into a shared ledger, no participant can change it. It becomes pretty difficult to change it. If the transaction includes an error then you need to do a new transaction to reverse the error. However, both the transactions will be visible.
A smart contract is an agreement between two people in the form of a computer code. They are stored in the public database and cannot be changed. To speed up the transaction set of rules is stored in the blockchain and execute automatically. It allows credible transactions without a third party. It is a self-executing contract.
How does blockchain work?
The user will generate a transaction by signing it with the private key. The private key will generate a unique code that no one can change or access. The blockchain will verify whether the transaction is verified or not, they can do this by using different algorithms. Once the transaction is verified, it will get a place in the ledger. It will get a unique ID and contain a timestamp to secure it from any further alteration. The block will then link up to the previous block, and then a new block will form a link with this block and so on. And this way, it creates a chain of blocks, thus the name blockchain.
How can be blockchain used in the real world?
One can use Blockchain technology in every industry sector. By replacing the centralized servers organizations or companies can benefit from all the advantages such as security, transparency, and speed. One can implement Blockchain for cross-border payments, elections, supply chain, gambling, and insurance.
Benefits of blockchain
- It provides greater security. It records the transaction permanently. No one can delete it not even administration. It is much safer than record-keeping systems. Blockchain technology reduces electronic fraud and helps people to do transactions safely over the internet.
- Blockchain solves the time-consuming process and also maximizes the efficiency of the process. It makes the work a bit easier as it does not require any paperwork. Everyone has the opportunity to access the same type of information.
- It eradicates human-based errors with the help of automation.
- Decentralization is one of the greatest benefits of blockchain. It is an open-source system and not control by a single source. The transactions are secure. The third parties cannot see or check them.
- It provides greater transparency. Transactions become easier through the blockchain. It shares the same document with all the participants of a network. No one can change this documentation.
Bitcoin is the first successful implementation of blockchain. Also, they used Blockchain technology recently for Bitcoin. But, it has more growth and development than Bitcoin. The properties such as security, privacy, traceability, inherent data provenance, and time-stamping have seen its adoption beyond its initial application areas. So, Blockchain technology is amazing! Nobody controls it instead control is distributed across the online community. Industries have started using the application of blockchain, soon the world is going to enjoy blockchain technology.