What is Blockchain technology?
Blockchain means a chain of blocks. Here, a block is digital information that is stored in a public database called the chain.
The blocks on the Blockchain contain all the information of the transactions, which include a dollar amount, date, and time. It also has information about who is participating in the trade, which means it stores data of the seller and buyer. The names stored are not the actual names, but the digital signatures like a username. The storage capacity of a single block is 1 MB of data.
Blockchain is a chain of multiple blocks connected in a network.
How Does Blockchain technology work?
Whenever a transaction happens in the Blockchain, the deal gets verified. The network of computers confirms the details of the purchase that is the participants, dollar amount, and time. Once the transaction is verified as accurate, all these transaction-related information gets stored in a block. Then, the neighborhood gets connected to hundreds or thousands of blocks.
The block gets the hash of the most recent block added to the chain, and then it gets added to the Blockchain.
When the new block gets added to the Blockchain, it becomes publicly available, and anyone can view this new block. If you see Blockchain, you can see the transaction data, which includes the time that is when the transaction happened, where (the height), and who added the block to the Blockchain.
What is so special about blockchain technology?
Blockchain is a democratized system. The network has no central authority. The network is peer to peer, and the blockchain ledger is distributed. There is no central server or primary storage. Anyone and everyone in the system can see the information. Blockchain technology is transparent for everyone, and every involved person in the network is accountable for their actions.
There is no transaction cost involved in such a network. Due to this special feature, technology has industry-disrupting capabilities. Blockchain can replace all business models and processes that depend on charging any transaction fee.
Blockchains can revolutionize the financial world. This technology can change how the stock exchanges work, the insurances contracted, and loans are bundled.
Why is the blockchain technology promising?
The technology provides incredible security, which is almost impossible to break. The information travels in a very secure manner with no transaction cost involved. If one wants to change a piece of original data, they need to hack the entire chain, which is virtually impossible.