The one technology which demand is growing day by day is BLOCKCHAIN – RECORD KEEPING TECHNOLOGY. You must have listened to the term Blockchain, Bitcoin, Hashcash, Merkel tree. It is emerging as the dominating and parallel system in the record-keeping arena. People are moving towards it as they believe that it doesn’t have hold of any authority or organization or a person, and it can keep their information/ money safe in today’s vulnerable world. But does it? To get the answer, we need to understand this technology called Blockchain.
Before we start with Blockchain and its features and complexity, let’s also understand the history of the Blockchain network. The first time the term blockchain (secured chain of blocks) was introduced in 1991 by Stuart Haber and W.Scott.Stornetta. But today, Blockchain was conceptualized and brought into existence by a person/group called Satoshi Nakamoto in 2008. Blockchain became the core component of Bitcoin (cryptocurrency). The Blockchain serves as a ledger for transactions on its network.
So to give you all details about the Blockchain – record-keeping technology, we will try to address all the answers through the below questions.
- WHAT IS BLOCKCHAIN?
- HOW DOES BLOCKCHAIN WORK?
- TYPES OF BLOCKCHAIN
- WHAT IS BLOCKCHAIN USED FOR?
- IS BLOCKCHAIN SECURE?
- WHO CONTROLS THE BLOCKCHAIN?
- BLOCKCHAIN Vs. BITCOIN
- ADVANTAGES OF BLOCKCHAIN
- DISADVANTAGES OF BLOCKCHAIN
- BLOCKCHAIN FUTURE
WHAT IS BLOCKCHAIN – RECORD KEEPING TECHNOLOGY?
In layman language, Blockchain is the only chain of blocks. It is a list of decentralized, distributed, or shared records, which is a called block and is linked using cryptography. Each block is consists of a cryptographic hash of the previous block, a timestamp, and transaction data details. It is an open and distributed ledger which can record transaction between two-person or parties.
Blockchain is managed by peer to peer network, adhering to network rule and creating, validating a new block. Once the data recorded in a blockchain network and the block created, it can not be modified. If you want to modify it, you need to change all subsequent blocks, which again require the permission and consensus of all concerned parties. Due to all this, its regarded as the most secure technology.
HOW DOES BLOCKCHAIN WORK?
Blockchain is a type of a ledger that contains information or details about the transactions; if the majority on blockchain network approves the deal, then the block is formed, and it refers to the previous block, and that’s the way it creates the chain, and it becomes blockchain. And every new or old user keeps adding the block, which becomes the chain eventually.
TYPES OF BLOCKCHAIN – RECORD KEEPING TECHNOLOGY
There are four types of Blockchain network.
- Public Blockchain – It requires no permission to access.
- Private Blockchain – It requires permission, its completely private.
- Hybrid Blockchain – It’s a combination of centralizing and decentralize features
- Sidechains – Sidechain is the designation for blockchain ledger which purpose is to run parallelly to the primary blockchain. Entries from the blockchain can be linked to the sidechain.
WHAT IS BLOCKCHAIN USED FOR?
Blockchain technology can be utilized or used in many areas, but the fundamental and primary use of blockchain is to be a distributed ledger for Bitcoin-like cryptocurrencies. So far, businesses are not in favour of using it as a principal structure. Blockchain technology is used in the following industry.
- Cryptocurrency – Bitcoin network, Ethereum
- Financial Services – Distributed ledger in banking
- Smart Contracts – Automated escrow
- Energy Trading – Peer to peer energy trading
- Video Games – Cryptokitties
- Domain Names – Namecoin
- Supply Chains – Walmart, IBM
- Protection of Intellectual property
- File Storage
- Identity Verification
- Other Uses – Music distribution, library service, Proof of existence etc.
IS BLOCKCHAIN SECURE?
In today’s world, Blockchain is more secure than the other centralized network. But your blockchain security is depending on the key generated; if you forget it or lose it, you will lose on the block you have created.
WHO CONTROLS THE BLOCKCHAIN?
No single authority or a person controls the Blockchain. Each party on the blockchain network has access to data information; each one can verify the data without the help of an intermediary. An organization can use specific or individual Blockchain. IBM has invested in Blockchain and are approaching businesses to integrate hyperledger and cloud (IBM) into their activities.
BLOCKCHAIN Vs BITCOIN
Blockchain is a distributed ledger or database, while the Bitcoin is cryptocurrency. Bitcoin is felicitated and powered by Blockchain technology. People often compare or link Bitcoin with Blockchain because Bitcoin was the first application used for blockchain; they both are separate models and entities and work with entirely different functions and for purpose.
ADVANTAGES OF BLOCKCHAIN
- Enhanced Transaction Security – More secured compared to other systems
- Transparency & Accountability – Transaction histories are transparent with Blockchain.
- Traceability – If there is an issue, you can trace it easily.
- Low cost –
- Decentralized system –
- Verification without third parties –
- Prevents Frauds –
- Hackerproof –
DISADVANTAGES OF BLOCKCHAIN
- Blockchain uses a lot of energy
- Scalability is an issue with Blockchain
- Data Modification – once the data is entered, its very difficult to modify.
- Private Key – If its lost, you can lose all the data and funds.
- Storage issue – Many times,s Ledger size becomes enormous, and to download and keep it, you need to have an ample amount of hard disc storage space.
BLOCKCHAIN – RECORD KEEPING TECHMOLOGY FUTURE
Though Blockchain technology has few disadvantages, it still passes with flying colours due to extra security and transparency features. Which makes it the leading technology in the coming days as it also works in a decentralized manner. Many Private companies and organizations are finding out ways to check whether the technology can be used in a specific application. Only the future will tell whether people accept it or still will remain cautious about it.
So, friends, I hope I have covered the points in this topic called BLOCKCHAIN – RECORD KEEPING TECHNOLOGY, and you got the information you are looking for. Do share the link of this article, if you like it, and also give suggestions, if any, in the comment box.