Currently, most people use a trusted middleman such as a bank to make a transaction, but blockchain allows consumers and suppliers to connect directly, removing the need for a third party.
So what is blockchain?
Blockchain is a system of storing information in such a way that makes it complicated or unfeasible to transform, hack, or deceive the system. The technique is intentional to timestamp digital documents so that it’s not possible to backdate them or temper them. The main purpose of blockchain is to get to the bottom of the double records problem devoid of the need for a central server; however, Blockchains could not be run without the Internet. It is also called meta-technology as it affects other technologies. It is comprised of several pieces: a database, software application, some connected computers, etc.
A blockchain is for all intents and purposes a digital ledger of transactions that are duplicated and dispersed across the entire network of computer systems on the blockchain. Each block in the chain consists of numeral transactions, and each time a fresh transaction occurs on the blockchain, a record of that transaction is added to each participant’s ledger. The decentralized database managed by manifold participants is recognized as Distributed Ledger Technology (DLT).
A straightforward analogy for taking on board blockchain technology is a Google Doc. When we generate a document and share it with a number of people in our contacts, in an instance, the document is distributed instead of sharing copied or transferred documents. This is what creates a decentralized division chain that gives all and sundry admittance to the document simultaneously. In such process, nobody is locked out pending changes from another group, as all moderations to the document are being recorded in real-time, making changes entirely crystal clear.
BLOCKCHAIN; a quick explanation
- A blockchain is a kind of catalog that records and stores blocks that are encrypted of data and then chain them all collectively to form a sequential single-fount-of-truth for the data.
- A blockchain is inherently distributed (meaning that many parties hold copies of the ledger), it is not inherently decentralized. Whether a blockchain is centralized or decentralized simply refers to the rights of participants on the ledger, and is, therefore, a question of design, which enables to trade any kind of asset with more liquidity and speed, at a lower cost.
- The assets are decentralized, allowing the public full real-time access and transparency.
- A transparent ledger of changes conserves the truthfulness of the doc, which helps create trust in the assets.
- In Bitcoin’s case, blockchain is used in a decentralized way so that no single person or group has control—rather, all users collectively retain control.
- Blockchain’s intrinsic security measures and civic ledger make it a chief technology for most organizations.
How does blockchain work?
The objective of blockchain is to let digital information to be recorded as well as distributed, but not at any cost edited. In this way, a blockchain is an establishment for unchallengeable ledgers, or records of transactions that cannot be distorted, deleted, or shattered.
As each transaction occurs, it is recorded as a “block” of data
Those transactions show the movement of an asset that can be tangible (a product) or intangible (intellectual). The data block can record the information of your choice: who, what, when, where, how much, and even the condition — such as the temperature of a food shipment.
Each block is connected to the ones before and after it
These blocks form a chain of data as an asset moves from place to place or ownership changes hands. The blocks confirm the exact time and sequence of transactions, and the blocks link securely together to prevent any block from being altered or a block being inserted between two existing blocks.
Transactions are blocked together in an irreversible chain: a blockchain
Each additional block strengthens the verification of the previous block and hence the entire blockchain. This renders the blockchain tamper-evident, delivering the key strength of immutability. This removes the possibility of tampering by a malicious actor — and builds a ledger of transactions you and other network members can trust.
Why do we need Blockchain?
Unchangeable transactions: By registering transactions in chronological order, Blockchain certifies the inalterability of all operations, which means when any new block has been added to the chain of ledgers; it cannot be removed or modified.
Security: Attacking a traditional database is the bringing down of a specific target. With the help of Distributed Ledger Technology, each party holds a copy of the original chain, so the system remains operative, even a large number of other nodes fall.
Transparency: Changes to public blockchains are publicly viewable to everyone. This offers greater transparency, and all transactions are unchallengeable.
Collaboration: Allows parties to transact directly with each other without the need for mediating third parties.
Decentralized: There are standards rules on how every lump exchanges the blockchain information. This method ensures that all transactions are validated and all valid transactions are added one by one.