‘Blockchain Technology” you must have heard or read this term somewhere on the internet or from word of mouth. But you are unaware of the details of it. Don’t worry you are not the only one. Many people don’t know about this technology because of it’s reach. Actually technology has evolved so much now that people are unable to keep up with the new developments. New technologies are taking birth every year so it is not our fault.
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In this article I will try to breakdown this term for you in simplest words possible.
Let’s jump right into it.
What is Blockchain technology?
The term “Blockchain” may look complex but it is actually simple to understand. Blockchain is basically a kind of database. A database is a collection of information that is stored electronically on the computer. This information or data is structured in a tabular form so that it is easy to access a specific information by filtering the data from the table.
Now information can be stored physically too, right? Like they did in the old days on registers. Surely, small information can be stored physically but if you see the magnitude of data that Blockchain can store you would understand why the need of this technology was felt. Massive amount of information or data is stored on servers that are made of powerful computers. Hundreds and thousands of such computers can be used to build servers so as to have the computational power and storage capability necessary for users to access data concurrently. This type of massive data are usually owned by a business or a person having the authority that has complete control over the working as well as the ability to access the data.
Key features of Blockchain
Blockchain is popular because it has certain advantages over the older forms of data storing methods like database. Let’s take a look at them
✱ Blockchain technology storage
There is a small but key difference between a typical database and Blockchain which is the way of its structuring. Blockchain holds information together in groups known as blocks. These blocks have storage capacity and when it gets filled, it is chained onto the previously filled block setting up a chain of such blocks which then is called Blockchain. So this cycle keeps going, new blocks get created and when they get filled they are added on to the previously filled blocks creating a chain of data.
Whereas database stores the data in a tabular form and not in blocks that are chained together.
The above discussion can be summed up by saying
“All Blockchains are databases but not all databases are Blockchain.”
This creation of chains of blocks also gives it a timeline. Each block gets a timestamp when it is added to the chain.
✱ Blockchain Technology is Decentralized
One of the main reason of its popularity and increasing usage is that it is decentralized.
Let’s understand this by taking Bitcoin as example
So, Bitcoin requires a collection of computers to store its Blockchain. So the Blockchain will store every transaction made by using Bitcoins. In Bitcoins case the computers are not all under one roof, and there are various operators of computers in different geographic location. So we can say that this system is decentralized.
On the other hand, let’s say a company owns thousands of computers and every transaction made by the clients of the company and their account information is stored on the computers that are all under the company’s roof so the company will have full control over all the transactions and the information of the clients stored on that computers. So in a way this system is centralized because it is under control of one person or one company.
Also in Blockchain, each node has the entire history of all transactions. Even if one node has an error in the data of a transaction, it can use the other nodes as a reference to correct itself. So, it can auto correct itself too. No node can alter the information of any other node, due to which each block that make up Bitcoin Blockchain is irreversible.
✱ Blockchain Technology is transparent
Because it is decentralized, all transactions can be viewed transparently. So it is transparent too. The transactions can be viewed either by one having personal node or by Blockchain explorers that allow people to view the transactions occurring live. You can also track Bitcoins. And because of it, if the exchanges get hacked which has happened in the past, the Bitcoins that they might extract can be easily traced. Every movement of Bitcoins can be traced.
Is Blockchain safe?
Because the transactions are added linearly and chronologically. They are always added to the end of the chain. It means no one can go back in the transactions to make any alterations.
Imagine if a hacker is trying to hack the Blockchain to steal the Bitcoins Since new copies are always being added to the chain. If they were to alter their copy then it would not align with everyone else copy. And when everyone cross reference their copies with each other, that one copy will stand out then the hackers version of chain will be regarded as illegitimate.
It can be done but for that hacker needs to side by side control and alter 51 percent of these copies of the Blockchain which would require a lot of money and resources. So, we can say that it is very much safe.
To sum up
Blockchain technology use is growing every year. Older methods are no longer efficient and effective so that’s why Blockchain is now being used in Banks, Health care industry, Supply chain management, Logistics management etc. Because these areas require to store huge amount of information which can no longer be done physically.
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