How Blockchain Technology Works?
We can say it’s a Digital Technology that stores the digital information in a most secure manner in multiple node servers and it is impossible to change or hack that. This technology works based on cryptographic functions. It changes the applications into decentralized one.
Blockchain is a method of storing data in such a way that it is difficult or impossible to alter, hack, or cheat it.
A blockchain is a digital log of transactions that is duplicated and distributed across the blockchain’s complete network of computer systems. Each block in the chain contains a number of transactions, and each time a new transaction takes place on the blockchain, a record of that transaction is added to the ledger of each participant. Distributed Ledger Technology is a decentralised database that is administered by various people (DLT).
A blockchain is a sort of distributed ledger technology in which transactions are recorded using an immutable cryptographic signature known as a Hash.
“Blockchain technology is most simply defined as a decentralized, distributed ledger that records the provenance of a digital asset.”
The Need for Blockchain Technology?
“Blockchain increase the Trustworthiness of Record-keeping and Financial Transactions”
If we want to understand why it is required, we must first understand how we already use programmes. We now employ a centralised approach to all of our applications.
For example, WhatsApp and Instagram both get data from a single server; however, depending on the user’s location, we may use a few more servers.
Despite the fact that we employ a few additional servers, all of the data is stored in a single system. As a result, there are more opportunities to hack or replace data in the server computer, if we so desire.
If we state that hacking is a widespread occurrence on the internet, we are referring to social media platforms. However, what about the financial and government sectors?
The centralised concepts are still used in banking systems, banking applications, and government sectors.
In these industries, we will now adopt decentralized concepts. As a result, we don’t have to rely on any centralized organization or server to keep our money or information safe. As a result, it will be safer, with no duplications or cheating in any of the sectors. As a regular person, I can understand what is going on in the system and what this data is.
How does Blockchain work ?
Blockchain is a framework that enables the storage of digital data in a public ledger. It is possible to distribute it, but not to alter it. We may call it an immutable public ledger because we can’t change, remove, or destroy any of the data it contains. It’s a hash of data that’s been stored.
But, In reality, blockchain is not a storage space; we can store data on it, but it has limitations. We are unable to store data in the same way that SQL databases do. Each piece of information, such as sending Rs.100 to a buddy, is transformed into a hash and stored in a block or node using specific techniques.
This blockchain is a collection of interconnected networks.
Each block will be made up of the previous block’s hash. If a new entry needs to be added to the chain, it must be acknowledged or validated by more than half of the blockchain network’s systems.
Furthermore, if we do so, every node in the network’s hash will change. This is one of the main reasons why the technology is so secure and not modifiable or hackable.
Consider the above image as a blockchain; three transactions are taking place.
- The first block or node holds the first transaction’s information and hash.
- Then the second transaction occurs; this second block will have its own transaction data and hash, as well as the hash of the first block, which is referred to as previous hash, and so on for each and every transaction. If a hacker tries to change the value in the second block, the entire hash of the second block will be modified.
- There is no need to change the data in the block; simply changing any tiny thing in that block, or even adding or removing space, will change the entire hash of the second block.
If the hash of one block is modified, the hash of all prior blocks is also updated. As a result, it will be rejected by more than half of the network’s nodes; the hacked block only contains incorrect information, therefore alteration or hacking is not permitted in that blockchain network.
These are only the basics of what a blockchain is, why it’s important, and how it operates. There are various forms of blockchain technology, each with its own set of constraints and qualities. It also has a greater number of applications.
Application of Blockchain Technology:
- We can employ digital crypto currencies (Bitcoin, Ethereum) to ensure that no one can print additional money and devalue it.
- We can use blockchain technology to implement voting principles in elections; no one can vote twice, and even if they did, this technology would prevent it.
- This technology can be used to create college degree certificates, allowing us to avoid additional bogus physicians, engineers, and other professionals.
- This approach may be used to create land properties, and there will be no more fake land documents in the city. As a result, a growing number of industries can benefit from this technology.
BitCoin the fuel to the Future
Bitcoin was created as a means of transferring money over the internet. The goal of the digital currency was to create an alternative payment system that was free of central control and could be used in the same way as existing currencies.
There have been various complaints regarding bitcoin, notably the fact that the mining method consumes a tremendous amount of electricity or is illegal in a few countries. In actuality, cash has served this purpose for centuries, and bitcoin’s public ledger could serve as a tool for future money.
If you’re a tech-savvy person, you’ve probably already heard about Blockchain or invested in Bitcoin.
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