In the last couple of years, blockchain has been a hot topic of discussion amongst tech enthusiasts, for many that don’t know blockchain is the underlying technology behind the leading cryptocurrency bitcoin. In this article, I’ll put the best of my efforts to make you understand what is blockchain and what are its potential implications?
In this digital realm, blockchain has gained substantial prominence so it is imperative to understand the under the hood phenomenon behind it. What makes blockchain set apart from the traditional database is its distributive nature.
Peoples have too many misconceptions about blockchain that’s why many businesses and enterprises refrain from implementing blockchain-based solutions. But I sincerely hope, this article aid in demystifying the blockchain technology and you’ll gain some valuable insight into this technology. Thereby you do not feel any hesitation in implementing this technology to streamline your regular business operations.
Introduction to Blockchain Technology
Blockchain is a decentralized network that keeps the complete track record of all the transactions in a node called block and the data stored in it is publicly accessible. This storage mechanism is referred to as ‘distributive ledger.’
Every transaction within this network is first verified by all the participants of the blockchain network thereby the transaction remains safe from tampering. Besides, the information stored in this network is not prone to hacking.
Simply speaking, a distributive ledger or a blockchain is an Excel spreadsheet that is accessible by all the participants of a network. What makes distributive ledger technology set apart from the centralized storage is that all participants of the decentralized network can view the data but no one can tamper it.
Popularity of Blockchain
Now I would like to discuss the reasons behind the prominence of blockchain. To keep that in perspective, let’s say that you want to transfer money to your friend or a family member who lives in a different country.
In this scenario, you would most likely go for online banking and transfer the money to an intended recipient using his/her account number. When the transaction is executed, your bank will update you regarding the status of the transaction. It sounds quite simple and counterintuitive at first glance, but this is where the real irony lies.
This type of transaction is vulnerable to malicious activity. Peoples who are familiar with the loopholes within this system would most likely prefer an alternate transaction processing system. This is where the power and significance of blockchain technology come into the picture.
From a technological standpoint, Blockchain is a digital ledger that has gained substantial traction in the market recently. But how does it gain massive traction, we’ll discuss it in detail.
Keeping the complete track record of transactions is paramount to the success of any business. Generally, this duty is performed by some third-party intermediary such as brokers, banks, or lawyers. But sheer reliant on these mediators to get this job done comes with a cost.
As of today, businesses are increasingly looking for an alternative way for transaction processing to reduce their operating expenses and to expedite the transaction processing.
The following are the benefits of Blockchain technology that paves the way for its massive adoption.
Blockchain aids in tamper-proof transactions leveraging the power of digital signature features which makes it almost impossible for the nefarious actor to change the data of a sender or a recipient.
In a traditional financial system, you need approval from the central banks or a regulatory financial institution to perform any transaction. In contrast to that, blockchain is completely decentralized so there is no governing body that validates the transaction between the sender and a recipient.
Blockchain technology is highly customizable and can perform immediate action, event, or a transaction when the mutually-agreed condition is met. The most prominent example of this feature is the RFID chip.
Blockchain is a technology that has a variety of different applications and it lays down the foundation of secure, transparent, and almost cost-free transactions. Adoption of blockchain can be gauged from a fact that many countries predominantly the Public Republic of China has lifted restrictions on blockchain-oriented crypto coins. I sincerely we’ll experience countless applications of blockchain in the near future.
To remain relevant in this digital realm, we need to equip ourselves with adequate education and training on a blockchain. Stay ahead from the rest of the curve and start learning it from today.