What is Blockchain Technology?With the cryptocurrency hype increasing everyday, the technology behind this would certainly have far reaching implications. One of technology is of the Blockchain.
What is Blockchain Technology?
In amateur terms, a blockchain is a database structure. But while a database stores data in a tabular form, blockchains are different. Data is stored in blocks, which are further linked together with a chain. When space of a block is completely filled a new block is added to the chain and hence the name “Blockchain”. It can be said that every blockchain is a database but the vice versa is not true.
The Blockchain system also inherently makes an irreversible timeline of data when implemented in a decentralized nature. When a block is filled it gets a permanent origin of timeline. Each block in the chain is given an exact timestamp when it is added to the chain.
Blockchains are basically ledgers of transactions in a digital medium. Each block in the chain contains a number of transactions, and every time a new transaction occurs on the blockchain, a record of that transaction is added to every participant’s ledger. The decentralised database managed by multiple participants is known as Distributed Ledger Technology (DLT). This means as the length of the blockchain increases the chances of data leak would be lower. This is because if hackers would want to corrupt a blockchain system, they would have to change every block in the chain, across all of the distributed versions of the chain.
Blockchain technology uses Hash Encryption to secure the data, relying mainly on the SHA256 algorithm to secure the information. The address of the sender (public key), the receiver’s address, the transaction, and his/her private key details are transmitted via the SHA256 algorithm. The encrypted information, called hash encryption, is transmitted across the world and added to the Blockchain after verification.
Blockchain Technology: Uses
The most important of this technology is to enable the existence of many cryptocurrencies, with the most popular being Bitcoin. In fact, the Blockchain system was invented for Bitcoin. Other cryptos using this technology are: Ethereum, Litecoin etc
In Blockchain technology, the process of adding transactional details to the present digital/public ledger is called mining. Though the term is associated with Bitcoin, it is used to refer to other Blockchain technologies as well. Mining involves generating the hash of a block transaction, which is tough to forge, thereby ensuring the safety of the entire Blockchain without needing a central system.
Future Implications of Blockchain Technology
The blockchain technology is believed to be capable of changing many facets of business in the future. A Blockchain System can be set up to operate in various ways, using different mechanisms. Judging by its success and increased use, it seems that the Blockchain Technology is poised to rule the digital world in the coming future.