In simple words, Blockchain is a very uncomplicated. And creative process of sending data from one end to the other. It is completely protected. And its also self operating. Here, the data is shared by drawing a block.
However, this block is authenticated by millions of computers. Which are spread throughout the internet. Now, this authenticated block is attached to a chain. Which is kept over the internet. So, that a distinctive data can be produced.
Therefore, even if one isolated data is found to be untrue. Then it implies that the whole chain with millions of occurrences is untrue. So, the data send or received is fully protected. And secured in blockchain method.
Definition of Blockchain
Lets see a proper definition of blockchain.
“It is an ethical and digital database of information. Which are coded in such a way that it can be utilized. And shared at the same time in a public network without any fear of protection”. It records financial transactions as well as any valuable thing.
Here, the data is present in the form blocks. And each blocks connects to each other utilizing fundamentals of cryptography. That is each blocks connects to each other using a chain. And hence, the name is Blockchain.
Some important points
- Blockchain was mainly made for Bitcoin,. And digital currency utilization.
- There is no centralized authority here. And the information here can be utilized. And shared safely in a decentralized network.
- It is invariable database of information. So, the information here can be seen by anyone who is associated with it. And the one who are associated are responsible for their respective behaviors.
- It does not charges any fee for the purpose of transaction. But the credit card companies. And many other such systems charges some transaction fee which blockchain don’t. Hence, blockchain can substitute all such systems.
- However, because of its free transaction cost. It can even ruin big companies. For example, Uber, Amazon etc.
How Blockchain works?
Now, lets discuss how this blockchain practically works utilizing an example.
Suppose, you have to send money from one end to the other end. Then, lets see how it can be done in blockchain.
Firstly, a transaction is requested from one end. Secondly, a block of online transaction is created that represents transaction block. Then, this generated block is send to each node of a network. That is, this created block is broadcast.
Then, all the nodes in the network verifies this block one by one. That is, this block is verified by the cluster of computers. And after the validation they approve the block if the transaction is valid.
Then, the nodes in the network receive the rewards for the verification process. After that this verified block can be added to the chain. Where the chain will give this block a unique and clear record of the transaction being made.
Then finally, the money is send from one end to the other end. And the process of transaction completes. Therefore, this is how a blockchain works practically.
Watch a video
Lets, watch a video to understand it explicitly.
So, Why to prefer blockchain from all the other such existing systems?
This is because of the following reasons:
- Any centralized single authority is not maintaining it. Instead, its maintained by a cluster of computers who are involved in the network. So, the hackers won’t have any centralized data for them to corrupt. So, the data here is safe and secured.
- The data is recorded here utilizing the fundamentals of cryptography. That is, the information here is cryptographically stored.
- The data here is invariable. So, its not possible for anyone to interfere the data present in the blockchain.
- It is unique and transparent. So, anyone can track the data in the blockchain.
Applications of blockchain
The applications are as follows:
- Payment and transfers,
- Digital Voting,
- Online music,
- Law enforcement,
- Real estate,
- Digital IDs,
- Internet of Things,
- Food safety,
- Weapons tracking and many more.
However, this was a small overview of the topic. We will learn each part in details in the upcoming articles. Therefore, i hope it was helpful. If it was, do comment. And must share to your friends. So, that they can even gain some knowledge about this great technology. Which will rule the world.
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