What is Blockchain?
If you’re aware of computers and currency, you’d be somewhat familiar with Blockchain too. Blockchain is a database. A database, that’s it? Let me explain. Blockchain is more than just that old database we all know from our school books. Its purpose is to give permission to record and distribute information, but not to edit it. Stuart Haber and W. Scott Stornetta in 1991, introduced Blockchain. But it got a fresh start in 2009 after the launch of BitCoin.
Is Blockchain a Chain of Blocks?
So you may ask, why is Blockchain called Blockchain anyway? Simple, because the information is stored in blocks. When the block gets filled with information completely, it forms a chain with the previous block. And so, a chain is formed, which we all know as ‘Blockchain’.
Hash in Cryptography and Nodes.
Every block has a cryptographic ‘Hash’ of the previous block; a string of numbers and letter. Hash saves the data in fixed length of encrypted output. A pinch of change in blockchain data could change the entire settings. This makes the Blockchain technology very safe. A copy of blockchain is lying with every computer which is called node. Phew! That is too much information isn’t it? Well! Not really. So you may ask how does a node work? That is a good question. So here’s how it works. A node’s function is to verify the data during a transaction. Nodes verify if there is any change in the transaction. Even a minor change in blockchain data changes the complete settings. This makes it very secure. Nodes also indicate if there is any change in the transaction. These nodes form the infrastructure of blockchain. They store, spread and preserve blockchain data. Blockchain updates itself in every 10 minutes. That’s right! Quicker than you’d be served pizza in a restaurant.
How is Blockchain useful for Bitcoin?
Blockchain is a particular type of data for bitcoin that stores all transactions. Blockchain stores options of bitcoin currency on computers. So, it can be used without any centralized authority. This reduces risk, and saves your transaction fee. Well! Only if you own Bitcoins. The blocks in bitcoin’s blockchain store data of monetary transaction.
Uses of Blockchain.
Blockchain can be used in many sectors and improve the services of those sectors. For example, if you deposit a cheque in bank on a weekend, you have to wait till Monday to get it deposited in your bank. However, with blockchain the process will take hardly 10 minutes. Fund exchange between banks and institutions can also be speedy. In healthcare, medical records of patients can be secured. And while securing the record a private key can be used. Can be used in supply chain and voting system. Accuracy of services can be improved. Cost reduction by ending the use of third party services. Transactions can be kept secure and private.
The ills of blockchain.
Like everything else it Blockchain also has demerits. It is not free; and is used in many illegal activities. One of the negative attributes of blockchain is that it decentralized, which means no authority controlling it. This makes it vulnerable to theft due to hacking. Apart from disadvantages of Blockchain, it is a technology of the future. Period.