Blockchain Technology: The Greatest Innovation of Internet
Facebook Founder, Mark Zuckerberg in February 2019 claimed that a decentralized system for storing Facebook users’ data can be the next best thing. He thinks that Blockchain Technology empowers users to access their information without going through any intermediary.
You’re going to understand the Blockchain Technology in brief. So, let’s begin.
What is Blockchain?
The concept originated when a person or a group with a pseudonym Satoshi Nakamoto thought of a decentralized system. A system where no central server exists. This will allow individuals to directly transfer currency using a “Peer-to-Peer Network“.
In late 2008, Satoshi came up with this Blockchain network for the world’s first Cryptocurrency, Bitcoin. The first Bitcoin transaction took place between Satoshi & a scientist. Blockchain Technology was used first-ever time at this point.
Blockchain is a public ledger that records all the transactions & distributes it to a network of computers known as “Nodes”. Once recorded & distributed it’s very difficult to alter or delete that information. Its fully decentralized, free from the influence of any third party. Therefore, its referred as Distributed Ledger Technology (DLT).
This leads us to the next question.
How Blockchain Works? How does it make sure security?
Whenever a transaction takes place, the information like the parties involved, date, time, location, amount, etc. are stored in a “Block”. A network of computers verifies the transaction before getting it stored. To save the information from disruption, its encrypted in a technical code called “Hash”. Hashing refers to a combination of letters & numbers. It consists of a fixed number of characters that are unique to every piece of information.
Every information stored in a block carries a hash code of the previous information. This makes it even harder for anyone to destroy the information.
Lets better understand all this with an example.
Assume that John places an order with Flipkart. Here hypothetically Flipkart uses Blockchain Technology for its users data. Now, using hash function all the information like the name (digital signature like username), time, date, amount, etc is encrypted.
Each computer works on a crypto puzzle. They prove the work by solving a problem. This system is known as “Proof of Work”. Solving this puzzle take efforts & demands a powerful computer. Data can be added to a block once the puzzle gets solved. A single block can store up to 1 MB of data. This whole process is termed as “Mining”.
Crypto Mining is among the flourishing careers of Digital World. Know Crypto Mining in detail
3 Pillars of Blockchain Technology
· Decentralization- Earlier a Central Authority used to record & store your data. That central authority used to charge & have power over your data. You were obliged to go through a process & ask them for the data. They could do whatever they feel like with your data like selling, stealing or disrupting it. Blockchain flipped that side. You can access data whenever you want.
· Transparency- The historical record of each transaction is quite transparent in itself. It doesn’t reveal any information as such. For example, instead of reflecting “John placed an order” it’ll reflect something like “n732judu2dwj89982uh”, a hash code. So, it’s way more secure than any other ledger technology.
· Immutable- The recorded information can’t be modified or deleted from the block. The main reason for this is the hashing & crypto puzzle. A different hash code is generated & recorded for every information. After that to verify the information a whole separate process is carried on. All in all, this is done to forbid anyone to do anything illegitimate with the data.
Blockchain is a mind-boggling technology. The greatest power in it is to decentralize a system and empowering the individual to whom that information belongs. It keeps the security up to the bar using cryptography. In the coming time Blockchain may be used by Businesses and Other Entities more frequently and more comprehensively.
You can explore more about Blockchain from Investopedia and other sources.
That’s all for this blog.
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