Blockchain – The Digital Way Of Recording Everyday Transactions

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The blockchain is a great invention done by Satoshi Nakamoto in 2008. It served as the public transaction ledger to the crypto currency – Bitcoin. Some people think blockchain could end up transforming many important industries, such as health care, politics etc. Although, the main question everyone is still asking is: What is a Blockchain?

What is a Blockchain?

The Blockchain is a technology containing blocks of information or transactions. Once finished, it connects with the initial completed block forming a blockchain. Each time one block is completed, a new one is generated. There are countless number of such blocks in the blockchain, connected to each other. It has complete information about different block users right from the original block to the most recently completed one.

Below image to understand how blockchain is formed:

When you add any information in the network, you add it to all computers in the network. But if another user in this network adds their information and make a new block after yours, you cannot modify your block. However, you can edit your block if you enable the editing option from all computers in the network. Every computer in the network has access to this shared record and uses special software to participate in the process. It makes the blockchain a public ledger that cannot be easily tampered with, giving it a built-in layer of protection.

Reduced transaction time and costs

When you send transaction to traditional banks, it’s a common thing for transactions to take days to be completely settled. This is due to protocols in bank transferring software, as well as the fact that financial institutions are only open during business hours, five days a week. You also have financial institutions located in various timezones all around the world, which delays processing times, but this is not the case for the blockchain.

Blockchain technology works 24 hours a day, seven days a week, which means the transaction process is quicker. It allows you to execute transactions without the need for a third party, which is often a bank or a central server. Since the intermediary is absent, it helps you to get rid of the additional cost.

The technology is attracting not only financial institutions and stock exchanges, but many others in the fields of music, diamonds, and insurance. Advocates have also suggested that this kind of electronic ledger system could be applied to voting systems, weapon or vehicle registrations by state governments, medical records, or even to confirm ownership of antiquities or artwork.

Protection:

Unauthorized access or modification of critical infrastructures, such as operating systems and network firmware, can seriously damage not only the security of a particular user but also weaken the national security with a large scale attack. The Blockchain technology will create an impregnable network with impossibility to get management access from the outside.

Blockchain technology has a lot of exciting potential, but there are some serious considerations that need to be addressed before we can say it’s the technology of the future. The ever-growing size of the blockchain is considered by some to be a problem, creating issues of storage and synchronization. Also, in order to validate the blocks in the same manner as a traditional private ledger, the blockchain employs complicated calculations. This requires powerful computers, which are expensive to own, operate, and keep cool.

As with any new technology, blockchain has been met with excitement and uncertainty in equal measure. While some countries have not accepted, there are few that are supporting the blockchain innovation – Dubai, Switzerland, United Kingdom, Estonia, Singapore and Cypus.

To sum up, there are lots of opportunities with Blockchain technology. Transparent transactions, full accounting of data are just first steps towards a better digital and sustainable world. Still, considering we are less than a decade since the blockchain’s first implementation, it seems we’re just seeing the start of adoption for this new idea.