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Blockchain: 5 Things You Need To Know

Blockchain: 5 Things You Need To Know

May 14, 2021 | 

915 Views | 

Tanvir Zafar | 

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If you are familiar with cryptocurrency or have invested in it in some way, the term blockchain should not be alien to you. Blockchain is commonly referred to as "the record-keeping technology behind the Bitcoin network."  Since its emergence in 2008, blockchain technology has become very popular and highly valued among various companies or establishments, mostly in the finance and banking sector.

With all the talk about blockchain and its relevance today, many have been led to look intoit mainly for record-keeping purposes. This is because blockchain technology has been proven to be a very reliable method of storing data, without worrying about it being corrupted or lost. But, before you decide to use this technology, it is wise to know what it is first.

BLOCKCHAIN: WHAT IS IT?

Blockchain is a complex form of technology with a lot of facets surrounding it. Its primary function though, is storing data or information. Blockchain can simply be said to be a unique form of database.

A database is basically a batch of information that is being stored on an electronic system, usually a computer.

The way a blockchain stores information widely differs from how it is stored on a spreadsheet in a computer system.

On a blockchain, collected data or information is stored in groups which are called blocks. Each block has a limited storage capacity, and once it is completely used up, it is chained to another previously filled block becoming a blockchain. When new information enters into the system, it is gathered into a freshly generated block that will also join the chain when it is completely used up as well.

Blockchains are not stored on single computers, and in most cases, each computer has a person or group of people that control it. These computers are referred to as nodes.

However, there are private blockchains whose nodes are controlled and owned by a single entity.

Here are 5 basic things to know about blockchain:

  1. IT IS NOT THE BLOCKCHAIN.

Contrary to popular opinion, there is not just one blockchain, but several. Blockchains are public record-keeping books that cannot be tampered with.

The most popular blockchain technology is the one being used by Bitcoin to store its transactions. Blockchains are not only used to track cryptocurrency, they can also be used to keep a record of stock, transfers, contracts, healthcare data, votes, and loans.

  1. IT IS SECURE AND TRANSPARENT.

Blockchain systems, especially public blockchains,are not controlled by a single entity. Every computer that the blockchain is set up on shares information over a peer2peer network. There is a copy of the ledgers on each of the nodes, and the information is trustworthy because of its digital signature.

Each block contains a small digital representation of big chunks of information called hashes.To fake or alter any information in an already filled-up block, one would have to alter its hash as well.

This will require that all the hashes built in the block, as well as previous blocks, be calculated again to conceal the alteration. This is practically impossible to do before more information and hashes are added to the chain end by other individuals.

  1. LARGE BUSINESSES MAKE USE OF BLOCKCHAIN TECHNOLOGY.

Blockchain technology is popularly known for its Bitcoin record keeping and cryptocurrency tracking. But it was originally brought up by anti institutions looking to break away from Central control.

As of recent, blockchain technology is being used and sold by big companies like Microsoft and IBM, and major stock exchanges and banking institutions are buying into it.

  1. IT DOES NOT REQUIRE A CENTRAL PARTY.

Blockchain is very transparent and nearly impossible to manipulate; for this reason, a middleman or agency is not necessary for database to be maintained.

This feature is very appealing to banking and trading institutions that value efficiency above all else. This, however, can prove to be a con because whentraffic on the system becomes too much, it may take the system longer to process transactions.

In contrast, it takes merely some seconds for transactions on credit cards to be confirmed because the system relies on a central party or middleman between the parties involved.

  1. IT HAS TWO TYPES: PUBLIC AND PRIVATE.

As the name implies, a public blockchain can be accessed by anyone participating in the network. Data on this blockchain can be written, read, and accessed by any participant.

On the other hand, a private blockchain is not easily accessed by the public, as it is controlled by a single entity. Data on this blockchain can be seen, written, and audited by only those granted access to it.

Both platforms are relatively secure, as information stored on them can’t be altered or erased.

CONCLUSION

Blockchain technology is very efficient and secure. Despite how complicated it is to understand, it is a sure way to store information with minimal qualms.

If you desire to use blockchain technology for your business, please research which type will be best, and suit your specifications, be it public or private.

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