What Is Blockchain Technology? | A Short Guide To Blockchain Technology

“Everything will be tokenised and connected by a blockchain one day”

Due to corruption, alteration, and manipulation in the system, the database is not secure these days. This database can include transactions, documents, entities, and much more. And this system is not reliable in the upcoming decade. Therefore, new technology was introduced to improve defects in the system which is known as Blockchain Technology.

The reason is,

  1. We don’t have access to the data.
  2. The admin of the database can change the data anytime.

Therefore, If we bring a system that is decentralized i.e, can’t be changed or is almost impossible to change, Then this kind of a system is known as Blockchain.

The idea of Blockchain was first implemented in 1991. In 2008, the first implementation of Blockchain was done by Satoshi Nakamoto.

Blockchain Technology

Real-Life Example

Let’s take an example of a shop. Suppose there is a grocery store and there is a shopkeeper who takes care of that. He keeps every record of sales and profits. These records are stored in a ledger. A ledger is a kind of notebook or a system where data can be stored.

Similarly with blockchain. Blockchain is also a kind of ledger that can be used to keep data. A blockchain is a chain of blocks, which means a chain of records. A single record of a blockchain is a single block.

What is Blockchain in Technological Words?

A blockchain is a chain of blocks ie, a chain of data. Every single block in a blockchain consists of 3 things.

  1. Relevant Information.
  2. Hash(#).
  3. Previous Block Hash(#).

These 3 things are stored in a block. And through these 3 things, we can track the history of data and transactions which are done.

Advantages of Blockchain

  • Security of the data.
  • Transparency of the data.
  • Automation.
  • Traceability.

Security System in Blockchain Technology

With the advancement in technology and data management system, there is a need for security. Because with every evolution there’s a new problem arises. Also, Every solution to a problem brings another problem. Therefore, the issue of security arises in blockchain technology.

But there are many layers of security that are implemented in blockchain technology.

  • Firstly, If we try to change the data of any block, the hash will automatically be changed. And once the hash of one block is changed, the data of other blocks will become invalid.
  • Secondly, If we try to change the data or hash of any block, then it will take at least 10 minutes for one block to get changed. In Bitcoin, It takes a minimum of 10 minutes to change data of one block and the total supply of bitcoin is 21 million. And you know much time it will take to change the data of 21 million coins? Almost 200 Years.

This time taking process comes with the term which is known as Proof Of Work.

What is Proof Of Work?

As it takes 10 minutes to change data of any block in blockchain technology, then we need to prove that we had given at least 10 minutes to make a change in the data.

But do you think is there any other way to change the data? Or Is there any loophole in this blockchain technology?

Voting System in Blockchain Technology

As the name blockchain suggests, the chain of blocks. To move further, we can say that blockchain technology has a chain of networks. And this network includes human control.

All the people who are in the network have a copy of the data. If anyone tries to change the data of any block, then he/she will have to share data with others in the network. People in the network will vote to change the data. They will agree or disagree whether this change is okay or not!

This voting system in the blockchain is known as the Consensus Rule.

Therefore, If you want to change data in any of the blockchains, then you need to pass through these rules:

  • You must spend a lot of time doing it.
  • Or you must own 50% of the network.

Uses Of Blockchain Technology

  • In Cryptocurrencies such as Bitcoin, Ethereum, Tron, and many more.
  • In Real estate, for notarizing the data that is recoding the data.
  • In the Hospital Management system for collecting patient records.
  • We can use this for building projects, startups, and businesses.
  • We can implement blockchain from scratch using any language.

There are many other uses of blockchain technology but these are some famous ones. We will cover this topic in another post. Till that, Stay Tuned.

There is a term in blockchain technology which is known as Smart Contracts.

Now, what are smart contracts?

Smart Contracts are kind of digital contracts. It ensures how the exchange of data should take place.

For more details on smart contracts, check out this post by IBM.

Click here: What are smart contracts on the blockchain?

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