Basics Of Blockchain

Ever since the rise of Crypto Currency, there has been a lot of buzz around the word ‘BLOCKCHAIN’. Many tech experts predict that blockchain will play a critical role as a highly secured database that will complement the rise of Metaverse. However, the very concept of blockchain can be a bit overwhelming and complicated for a lot of people. So, if you are someone who is fascinated by the concept of blockchain but finds it a bit difficult to understand it, then this article will surely help you!

WHAT IS BLOCKCHAIN?

If you go by the textbook definition you get,

“A blockchain is a distributed database that is shared among the nodes of a computer network. It stores information electronically in digital format.”

In simple words, blockchain can be considered as networks of computers connected to each other and the data to be stored is stored on the entire network rather than on a single computer.

How does it work?

The working process of Blockchain Technology is easy yet difficult at the same time. So, I have tried to explain the process in the simplest method that I can,

STEP 1: A transaction is initiated

• The transaction can be performed for any type of asset tangible or intangible.

STEP 2: Transfer of transaction

• Once initiated, the transaction is transferred to the network of computers.

STEP 3: Decryption

• The computers in the networks then solve equations using cryptography and hence confirms the validity of the transaction.
• Once the transaction is validated, the data is stored across the blocks in the peer-to-peer network.

STEP 4: Connection

• After the data is stored in blocks, these blocks are linked to each other thus preventing any type of altering to the data stored inside the blocks

Advantages Of Blockchain Technology

1. Improved Security

• The creation of blocks that are linked to each other, provides end to end encryption and prevents altering and tampering with data

2. Speed

• Blockchain cuts the intermediaries that significantly increase the speed of all the transactions carried out on the blockchain.

3. Visibility and Traceability

• Since all the steps carried out are connected to each other, it's always to trace the origin of the data and hence help to validate its legitimacy.

4. Immutability

• Ensures transactions can’t be changed or deleted

Conclusion

As the world moves further into the ‘Digital Era’ and digital currency gains more recognition, blockchain technology will inevitably arise. There are even possibilities that blockchain may even replace banks to some extent.

With all the advantages, blockchain’s use won’t be restricted to only one industry. It will be extensively used in finance, cybersecurity, cloud storage, IoT, networking etc.

So, without a doubt, Blockchain is the future of technology. However, it is still at a very early stage. With enough time given, it will gain a lot of attraction and hence will become a widely used concept.