What Is Blockchain Technology?
Blockchain technology seems like a daunting term because of how it is perceived by the public. However, when one looks at the basics, the concept of blockchain technology is not that complicated. Blockchain technology at its core is an encrypted form of data storage. However, to understand the main idea of blockchain technology, one must start with the basics.
The database is basically like a record of different pieces of information that is stored in a computer, with labels so that it is easy to go through it to find a particular piece of information. However, when one thinks of storing data, there are numerous ways to do so, to store it in a conventional method by writing it down, or entering the data into a spreadsheet, but these methods come with consequences and some cons. For example, if there is an accident and you lose the data, it is lost forever, or to be able to dispatch the data do more than one people there must be more copies created; however, blockchain technology has made it easier for people to store data online that too with the privacy that is almost impossible to break-in.
Therefore, blockchain technology can be used by many people and different organizations to store their data online in a blockchain and share it with many other servers at once while keeping it encrypted and safe from hackers at the same time.
The main advantages of blockchain technology are that it is highly secure – whenever a piece of information is saved on the chain – a block is added at the end of the chain, and it is extremely hard and almost impossible to go back to the previous block to change anything. The changes can only be made when many people that have access to that chain allow it to do so. The blocks are secured with their respectable hashes that are time-stamped when the data is stored on the chain.
Whenever a block is tampered with, the hash of that block changes, and when other members look at it and try to match them, they can tell that somebody has changed the information or got access to it while they were not around. To access all the information available on that blockchain, the hacker would have to tamper a total of 50% of that chain which is impossible to do so because of how long it takes.
Main Components of a Blockchain Technology
- The distributed ledger technology
In this form of blockchain technology, all participants in a particular network have the Accessibility to the Ledger or the distributed data in its unchangeable form where people can view the data; however, they do not have the authority to create another document to duplicate the model of the data.
- The immutable records
In this blockchain technology, all the recipients of the data have no authority to change anything in the document once it is entered and saved in the chain. However, if that is any tampering, then the previous transactions must be recorded again for the whole Ledger to be visible to the viewers again.
To speed up the process of transactions, contracts can be saved on blockchain technology so that people can get access to it immediately. This is a highly efficient way of accessing and distributing such sensitive documents.
How Does the Blockchain Technology Work?
Whenever a set of data is introducing to the chain or any transaction is made, it is saved in a block that includes all the data of that particular transaction. The block can include any type of information such as numbers, words, addresses, etc. The blocks in blockchain technology are linear and connected. In a way that when information is added to the blockchain, every block is placed in a linear order, and the exact time is mentioned on the block, and a hash is assigned to do it.
The purpose of that hash is to ensure that there has been no tampering done with a particular block because if anyone tries to change the data or even get hold of it, the hash of that block will change and block access to other blocks. Therefore, a security bubble is created around the data that is stored in those blocks.
Whenever a new set of information or a transaction is introduced to the blockchain, it enhances the security of the previous chains as it makes it more difficult for anyone to have the data because to do so, the hacker will have to go through each block separately.
History of The Blockchain Technology
Blockchain technology is surely a new phenomenon. However, the struggle to boost it goes back to a twin and interesting timeline. In early 2008 Satoshi Nakamoto, which was a fictitious name for a person, or a group of people, published an article named “Bitcoin call in appear to pair electronic cash system.” Moving on to 2009, a computer scientist, Hal Finney, and the fixtures Satoshi Nakamoto perform the first-ever successful cryptocurrency transaction involving the Bitcoin
2010 marked as the year where for the first time, a cryptocurrency transaction was made to purchase a good. Two pizzas were bought by a programmer who was based in Florida who transferred 10,000 bitcoins to the Papa John’s pizza chain, which was about $60. The worth of those same bitcoins is around $80 million today as the market cap of Bitcoin has officially exceeded the $1 trillion mark.
As things started to get real, the first parallel of the Bitcoin was drawn with the US dollar where both currencies are equal to 1 another; however, now one Bitcoin equals around $57,000. Slowly and steadily around 2012, the public started to get a gist of what cryptocurrency or the blockchain was as the terms were casually mentioned in popular TV shows such as The Good Wife, which save the bots of the blockchain technology enter the minds of the younger population, which in a way has given a boost to the words of Bitcoin today.
In 2013 alone, the estimated market cap of Bitcoin passed the mark for billion dollars for the first time in its entirety which was an achievement for blockchain technology. After the booming success of cryptocurrency and Bitcoin, numerous companies, including Las Vegas hotel and websites like overstock.com, introduce the option to accept cryptocurrencies as a mode of payment. The big guns of the industry, including PayPal, introduced the inculcation of the cryptocurrency into their systems which was an achievement on its own biggest of how globalized people were at that time.
As time went by, many technological giants like IBM introduced solutions for businesses that are based on the cloud storage system that took advantage of the blockchain technology. However, in 2016 there was a breakthrough in the journey of blockchain technology when the Japanese government held that blockchain is the cryptocurrency as a legitimate source of data storage.
All these events since 2008 have paved the bot for the success of cryptocurrency and blockchain technology in the current era. The most recent breakthrough was in 2018, almost ten years after the first published article about cryptocurrency and the blockchain. Facebook has made commitments to start a group that will include blockchain technology, and they are most likely to create their version of the cryptocurrency to make the world more receptive towards this technology.
The Uses of Blockchain
- Ease of data storage
As discussed above, the basic concept of blockchain is to store data. But there are numerous other ways does this technology of blockchain can be utilized to keep a check of transactions that just not include data.
Bigger corporations have taken the plunge to include blockchain technology to store their data online to keep it safe and to flow around their network of change around the world; the companies that have done so include Walmart, Pfizer, general ever, etc.
In addition to this, many food organizations or manufacturers have started to keep a check on their deliveries through blockchain technology. Many food items were infected with viruses Anne James like eagle eye, that was proved to be harmful to people causing deaths.
However, now, thanks to blockchain technology, food organizations have started to build a system that would keep a check on every stop there is from the factory to the delivery side so that the food can be kept safe and away from any germs.
- Beneficial For Improving Banking Industry
When we look at the industries that have benefited from blockchain technology, out of those that stand at the top is the banking industry. Not more than a few years ago, when someone had to deposit a check on a weekend, they had to wait until Monday should that the banks can process the check to do this transaction.
However, these days, people have started to use blockchain technology for the transfer of funds that includes the cryptocurrencies such as Bitcoin in any stadium. To make matters easier, if the bags around the world integrate blockchain technology and digital currencies into their system, it will boost trade around the world and give ease of business to many entrepreneurs around the world.
For many years, people have been bound by banks to store their money. However, there have been many instances where banks have been looted, and the information of the client has been at risk. However, the integration of digital currencies and blockchain technology has completely changed the game. Due to the high safety protocols of blockchain technology, it is easier for people to keep that information safe away from hackers. However, if the banks around the world integrate blockchain technology into their systems, they will be able to keep the information and the money of their clients safe from any type of cyberespionage or ball grease.
Since banks are reluctant to do so, it is expected that soon digital currencies would take over, and people will no longer be bound by the banks to keep a check on their assets.
- Medical Records
Hospitals around the world need to save millions of files of their patients. However, if there is a virus in the system that corrupts the file, there are many lives at risk. Therefore, if hospitals use blockchain technology around the country, they can very easily go integrate their records so that if a patient must move to another hospital and hurry, the paperwork can already be present there so that the procedures are taken care of without any wastage of time. In addition to this, the security of the blockchain will ensure that nobody else except for the authorities of the healthcare Department get access to these files so that the integrity and the privacy of these documents can be ensured.
Another interesting way of integrating blockchain technology into our daily lives is to hold the voting procedure through the blockchain technology where people can vote from wherever they want with full privacy so that no tampering is done with the ballot boxes and then when it is announced without any privacy breaches.
Pros and Cons of Blockchain Technology
As of now, no one can decide or determine what the bounds of blockchain technology are. Since very little of it has been explored until now. However, the numerous benefits that include decentralization of storing data and a new way of privacy that is free from any errors are something that people are looking forward to in the foreseeable future.
- Since the handling of the data would be done without the involvement of any human being, it will surely include no errors; therefore, the storage of the data would be more efficient.
- The non-inclusion of any third party into a security software or human clerks would reduce the cost of data storage for many companies in the future when this technology is induced in every other organization that there is.
- One of the main pros of blockchain technology is the security inefficiency of currency exchange and the ease of transactions that are done within a matter of seconds without any involvement from third parties such as banks or the government.
- Blockchain technology is extremely safe in transparent. Therefore, there is nowhere does information can get tampered with, which is a relief for so many people and organizations.
- Blockchain technology provides the common people to be free of being in the pressure of bags and the government; therefore, with inducement off the blockchain technology, people are more in control of their assets.
- The main concern of blockchain technology and digital currency is that the cost of mining bitcoin is high, including the price of the coin itself. Therefore, it is very hard for people to get hold of these coins now.
- The transactions are easy to do, but the number of transactions per second has a very low rate which on a high level can be a problem for many traders and entrepreneurs.
- The regulation of blockchain technology is hard to do since there are no authorities involved.
Publicly Owned Blockchain Technology
This blockchain can be joined by anybody at any given time; however, just some of those people responsible for taking care of everything that is done in that network. To understand it on a simpler note, one can take the example of a WhatsApp group. Anyone can send in a message that includes text or pictures; however, only a few people that are deemed as the admins of the group can add people or remove people from the group. Only the admins can change the display and the settings of that group.
The private blockchain is a type of blockchain where members must get a permit to take an entry to enter the respective system; however, not everybody is entitled to take that decision. Only a few people can allow others to enter the chain. An appropriate example of this would be a school, where every kid needs a permit to enter from the authorities, such as the principal or the teachers, and they must abide by the rules said by those authorities. Similarly, in a private blockchain, the members must have a permit to enter, and once they do, they need to take care of the rules and regulations of that blockchain so that they can prolong their stay.
In conclusion, blockchain technology has just started to take over the world. According to many critics, it is argued that aristocrats of the world would be in charge of blockchain technology and cryptocurrencies as everything would be on the wreckage of the blockchain technology. However, it is too early to decipher whether this advancement would be a blessing or a curse for this world.