Inspiration Technology

Blockchain – Explained in simple words

Blockchain

A blockchain is a distributed database that is shared among the nodes of a computer network. As a database, a blockchain stores information electronically in a digital format. Blockchains are best known for their crucial role in cryptocurrency systems, such as Bitcoin and Ethereum (you could know how to buy ethereum here), for maintaining a secure and decentralized record of transactions. The innovation with blockchain is that it guarantees the fidelity and security of a record of data and generates trust without the need for a trusted third party. The three important pillars of blockchain are: blocks, nodes and miners.

A blockchain collects information together in groups, known as blocks, that hold sets of information. Blocks have certain storage capacities and, when filled, are closed and linked to the previously filled block, forming a chain of data known as the blockchain. All new information that follows that freshly added block is compiled into a newly formed block that will then also be added to the chain once filled. Each block in the chain is given an exact time stamp when it is added to the chain. Blockchain is a promising and revolutionary technology. It helps reduce risk, stamps out fraud and brings transparency in a reliable way for multitude uses.

Functioning of a Blockchain

  • The central objective of blockchain is to pave the way for the recording and distribution of the digital information, but not edition. In this way, a blockchain turns out to be the foundation for immutable ledgers, or records of transactions that cannot be altered, deleted, or destroyed.
  • Blockchains store data in blocks that are linked together through cryptography.
  • When a new data is inserted into it, it is entered into a fresh block. Once the block is filled with data, it is chained onto the previous block, which makes the data chained together in chronological order.
  • In Bitcoin’s case, blockchain is used in a decentralized way so that no single person or group has control-rather, all users collectively retain control.

Features of Blockchain

  • Blockchain allows the data held in that database to be spread out among several network nodes at various locations. This not only helps in creating the redundancy but also in maintaining the fidelity of the data stored therein.
  • All transactions are crystal clear and can be viewed by either having a personal node or using blockchain explorers.
  • Each node contains its own copy of the chain that gets updated once the fresh blocks are confirmed and added.
  • The records stored in the Bitcoin blockchain are encrypted. This means that only the owner of a record can decrypt it to reveal their identity.
  • The non-fungible tokens, also called NFTs are stored on the blockchain. If interested, you could consider buying NFTs as a form of long-term investment along with your bitcoin and other digital currencies.

Bitcoin and Blockchain

The key thing to understand here is that Bitcoin merely uses blockchain as a means to transparently record a ledger of payments, but blockchain can be used to immutably record any number of data points. Bitcoin is a cryptocurrency invented for blockchain technology. In the current economic climate, there could be thousands of cryptocurrencies in circulation, which might make investing confusing for many people. People should, therefore, read informational blogs and articles online about cryptocurrencies (such as the one on this cool crypto blog) to get an idea of which coin works best for them.

Blockchain allows Bitcoin and other cryptocurrencies to operate without the need for a central authority. This not only reduces risk but also eliminates many of the processing and transaction fees.

Smart Contracts

A smart contract is a computer code that is installed into the blockchain with the purpose to facilitate, verify, or negotiate a contract agreement. Smart contracts work under a set of those conditions which are agreed by the users. When those conditions are met, the terms of the agreement are automatically carried out.

Useful inVoting

Blockchain could also be used to facilitate a modern voting system. Voting with blockchain proves to be fruitful as it carries the potential to eliminate election fraud and boost voter turnout, as was tested in the November 2018 midterm elections in West Virginia. Using blockchain in this way would make votes nearly impossible to tamper with.

Accuracy of the Chain

Trans actions on the blockchain network are approved by a network of thousands of computers. This removes almost all human involvement in the verification process, resulting in less human error and an accurate record of information.

Thriving Success of The Blockchain

The number of live blockchains is growing every day at an ever-increasing pace. As of 2022, there are more than 10,000 active cryptocurrencies based on blockchain. Bitcoin and Cryptocurrency are the two important pillars that have earned name and fame for Blockchain. Blockchain stands to make business and government operations more accurate, efficient, secure, and cheap, with fewer middlemen.The main role of Cryptocurrency is to function as digital cash. Cryptocurrency coins have their own native blockchain, i.e Bitcoin (BTC) , Monero (XMR) and Bitcoin cash (BCH).

Who Invented Blockchain?

Blockchain technology was first outlined in 1991 by Stuart Haber and W. Scott Stornetta, two mathematicians who wanted to implement a system where document time stamps could not be tampered with.

Importance of Blockchain

Business runs on information and to run a successful business it is very important that the information should reach to its authorized member faster, accurately and precisely. Thus, Blockchain is the best platform for delivering that information as it provides immediate, shared and completely transparent information stored on an immutable ledger that can be accessed only by permissioned network members. A blockchain network can track orders, payments, accounts, production and much more. It is possibly the reason why many enterprises including some of the top casino sites accept bitcoin payments.

Blockchain’s security makes theft much harder since each cryptocurrency has its own irrefutable identifiable number that is attached to one owner.

With blockchain, crypto can be sent to anywhere and anyone in the world without the need for currency exchanging or without interference from central banks.

Conclusion

We can conclude that Blockchain is a system of recording the information in a way that it makes it difficult and impossible to hack or cheat the system. Blockchain is essentially a digital ledger of transactions that is distributed across the entire network of computer system. It is an user friendly technology and the information it contains is highly secure.

About the author

Manoj

Manoj is a designer/front-end developer with 8+ years of experience. Other than front-end coding, he loves to write on design trends.