- What is Blockchain Technology?
- Uses of Blockchain Technology
- Benefits of Blockchain Technology
What is Blockchain Technology?
In simple terms a blockchain is a chain of blocks that is interconnected into a sequence that cannot be broken or tampered with. A blockchain block consists of the data regarding the transactions that occur on the blockchain. The blockchain is like the internet where multiple computers known as nodes are connected to each other but blockchain is a decentralized network that is not controlled by any single authority. Rather in a blockchain, all the nodes are connected in a decentralized manner and all the transactions can be executed, validated in a decentralized manner.
Bitcoin is an example of a network based on the blockchain technology. It is to be noted that all the transactions are added on the blockchain only if they are verified by all the nodes connected in a blockchain and once the transaction is recorded it stays on the blockchain permanently and in no way can be removed, edited or muted. This makes a blockchain trustworthy and a highly secured network.
Uses of a Blockchain Technology
There are numerous use cases of a typical blockchain and it is one of the technologies that can completely transform the industry in which it is used as it can introduce the concept of trustless transactions that is impossible in a traditional network. The following are the areas in which the blockchain technology can be used:
- As a currency for paying for goods and services. Bitcoin is an example that has become a well known cryptocurrency and is being widely used as a payment method.
- Elections and voting is another arena in which blockchain can be revolutionary.
- Copyrighting, royalty protection, online gambling and many more.
Benefits of a Blockchain Technology
There are numerous benefits of blockchain technology and they are discussed here:
The copy of all the transactions and data regarding the transaction have a copy distributed on all the nodes connected and are updated in the real time ensuring that the process is completely decentralized and controlled by no central authority.
The transactions on a blockchain are stored on a distributed ledger and hence can be viewed by anyone connected to the blockchain network. The transparency reduces the chances of malpractices during the transactions and the transactions can be tracked easily.
Though transactions on the blockchain are transparent, yet they are tamper proof. A transaction is only added to the blockchain if it is validated and verified by all the connected nodes in the network. The transaction once recorded cannot be changed, muted or tampered with making it one of the most secured networks there is.
The transactions through a blockchain are lightning fast as there is no need for a third party validator for verifying the transactions. The transactions are executed automatically and in a decentralized manner.
As there is no involvement of a third party intermediary, the transactions are inexpensive and are way lower than the current transaction costs of the centralized networks.
Disclaimer: The article should not be considered as any financial advice. It is advisable to conduct thorough research before investment.
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