Blockchain Technology: A Simple Explanation

Blockchain technology is undeniably an intelligent invention. It is commonly known as the foundation of bit coin digital currency. With potential uses in other digital fields, blockchain technology today is the new backbone and identity of the internet.

The blockchain network is a democratized system with no central authority. It is highly transparent, and you are accountable for your actions if you build something on the blockchain.

What exactly is Blockchain Technology?

• At the most basic level, blockchain technology is simply a chain of blocks.
• The blocks are referred to as digital information, and the chain is the public database.
• At a complex level, blockchain technology is the digital information stored in a public database.
• These blocks store information regarding the date, time, and amount of your most recent transaction.
• The information about the person who is participating in the transaction is also stored.
• In more complex words, the blockchain data structure helps in creating a digital ledger of transactions.
• This digital ledger is shared among a vast network of computers.
• Every new transaction leads to the addition of a new block in the chain.

Why is Blockchain Technology Popular?

The reasons behind the popularity of blockchain technology are:

• There is no single owner of this technology. It is decentralized.
• The data is stored cryptographically.
• No one can manipulate the data that is present inside the blockchain.
• Due to the transparent nature of blockchain, anyone can track their data.

What are the Advantages of Blockchain Technology?

• No human involvement in verification is required, which makes it an accurate technology.
• No third-party verification is involved, which reduces the cost.
• It is safe to use. Hackers cannot corrupt this technology because it is not centralized.
• All the transactions made are private, secure, and efficient.

Where is Blockchain Technology Used?

Blockchain helps users to create authentic digital information. Some of the applications of blockchain technology are:

Smart Contracts: Simple contracts are coded with the help of distributed ledgers. These smart contracts are then executed when the specified conditions are met.

Sharing Economy: Blockchain’s peer-to-peer payment options facilitate direct interactions between many parties.

Crowd Funding: Blockchains help in creating venture capital funds, which take crowd funding to a whole new level.

Governance: Distributed database technology of blockchain can make election results fully accessible to the public. This can lay the foundation for fully transparent elections.

Supply Chain Auditing: Blockchains makes it easier to track the origin of the product. The dates and the locations of the products correspond with the product numbers.

File Storage: Blockchains help in decentralized file storage, which prevents corrupted files and hacking.

Internet of Things: Blockchains are used in automating various remote systems with the help of software, network facilities, and sensors.

Micro grids: Blockchain technology is being used in renewable energy. It helps in setting up micro grids within local areas.

Identity Management: Distributed ledgers use enhanced methods to manage the secure and digitized identity of the individuals involved in transactions.

Stock Trading: Blockchain technology enables instant peer-to-peer stock trading which removes intermediate parties like auditors and custodians from the process.

Wrapping It Up

Blockchain technology was first introduced in 1991. Like most of the technologies, blockchain also faced public scrutiny with speculations about its capability and the future. However, with intense research and practical applications being explored and implemented, blockchain technology has finally gained popularity.

Blockchain technology has become a new buzzword worldwide because of its accurate, secure, and efficient business and government operations. With a large amount of information and data available on websites and online news portals, it's not a question about whether the companies will opt for this technology or not, but it's a question about "When"?

Sarah K, a professional writer who share interests in different creative niches. Her ideas and tips towards such niches have contributed to the online community.