Blockchain Technology Explained in Simple Terms
About a decade ago, nobody was interested in ‘’Blockchain’’ nor what it meant. Engaging individuals in blockchain-related conversations back in 2009 would leave you with a huge list of deaf ears.
With the revolutionary impact that the technology has garnered over the years, a lot of individuals and enterprises are now interested in utilizing its profitability in their day to day business.
We would like to use this piece to provide our readers with detailed information on all the intricacies attached to making use of the technology. This piece provides you with the ‘’How’s and Whys’’ of blockchain in the simplest terms possible.
First things first, ‘’What is Blockchain Technology?’’
Blockchain is popularly known as a decentralised ledger that provides individuals and enterprises with the ability to carry out transactions without the involvement of a third party.
Okay, when we say ‘’Decentralised’’ what do we mean?
Let’scite an example with our regular banking methods. Making a payment or carrying out transactions via the regular banking method would require the two parties involved and a bank standing as the middle man. When transactions are carried out via the regular banking method, the parties involved have no control over the database or ledger used for such transactions.
In most cases, only the bank possesses a copy of such records. Blockchain provides a decentralised ledger that leaves room for both parties involved to see all the information pertaining to the carried-out transaction thereby leaving out any form of interference from a third party.
How does Blockchain Operate?
With no room for third parties to verify carried out transactions, how can individuals and enterprise bank on its reliability?
The decentralised ledgers that blockchain operates with stores the data of every carried-out transaction in nodes. These nodes are visible to both the parties involved. Every transaction carried out are verified by several nodes ensuring that updated records are kept at all times.
Compilation of numerous nodes is bundled up into a block. While these blocks can be accessed by thousands of users, making changes to any of the blocks is impossible due to its presence in the blockchain wallet of both parties involved.
Blockchain Validation
To ensure that transactions are carried out appropriately by every blockchain user, public and private keys were created.
Public keys come in handy when an individual is trying to carrying out a transaction with another blockchain user. The public key makes it easier for users to verify the account information of the individual they are about to send funds to. Users between both ends of the transactions are granted access to the public key of the other.
Private keys, on the other hand, is like a password attributed to every blockchain wallet. Private keys are used to create digital signatures when carrying out blockchain transactions. These digital signatures along with the public key are sent to the user at the other end providing easy access for users to validate transactions at all times.
Blockchain Mining
The decentralised ledger that blockchain operates with is stored on thousands of supercomputers. To keep the technology running, mining of the nodes used to verify the authenticity of every transaction is of utmost importance.
There are numerous blockchain mining companies across the globe so you don’t need to worry about the technicality attached to blockchain mining. Note that these miners are provided with a small fee for each transaction carried out.
Blockchain and Cryptocurrency
Cryptocurrency is a major player when it comes to the usage of blockchain. While numerous cryptocurrencies can be accessed via a blockchain wallet, we would focus more on the most notable of all ‘’Bitcoin’’
The bitcoin cryptocurrency usage has made it easier for individuals from any part of the world to send or receive funds via a blockchain wallet. Note that bitcoin is not yet a stable coin and is prior to change based on the market economy.
Why is blockchain important in every industry?
Blockchain is currently regarded as the safest way to carry out online transactions. Its online presence is not just tied to monetary transactions. With lots of blockchain app development companies available, its usage has been adopted by numerous industries worldwide.
It is widely used to store medical records, carry out real estate transactions, secure messages, smart contracts, and more. Running a personal or business-oriented blockchain operation via a decentralised ledger is also possible.
Note that there is no actual government or governance behind the creation of blockchain, there is every possibility that you can run into scam sites operating under its alliance while making use of its services.
