Blockchain Technology : Simply Explained.

The first thing you’ll need to know about blockchain;
I would say this technology is a distributed and secure database for value exchange, but the first application of the blockchain technology made it seem like the digital currencies were its only application. It represents an innovation in information registration and distribution that eliminates the need for a trusted party to facilitate digital relationships.
Yet, blockchain technology, for all its merits, is not a new technology.
Rather, it is a combination of proven technologies applied in a new way. It is the merging of two existing technologies:
Cryptography + Distributed Ledger Computing.
For this reason, Blockchains are incredibly popular nowadays. What is a blockchain? How does it work? And What problems does it solve? Or Is it the next internet?
What is a blockchain?
A blockchain is the structure of data that represents a financial ledger entry, or a record of a transaction. Each transaction is digitally signed to ensure its authenticity and that no one tampers with it, so the ledger itself and the existing transactions within it are assumed to be of high integrity.
The real magic comes, however, from these digital ledger entries being distributed among a deployment or infrastructure. These additional nodes and layers in the infrastructure serve the purpose of providing a consensus about the state of a transaction at any given second; they all have copies of the existing authenticated ledger distributed amongst them.
What are the benefits?
Many people think of blockchain as the technology that powers “BITCOIN”, while this was the original purpose blockchain is capable of so much more. Despite the sound of the word, there’s not just one block, in fact Blockchain is shorthand for a whole suite of distributed ledger technologies that can be programmed to record and track anything of value, it could be a;
- financial transaction
- medical record
- land title, etc.
You might be thinking “we already have processes in place to track data, what’s so special about blockchain?” Let’s breakdown the reasons why blockchain technology stands to replace the existing systems;
- It is a decentralised database which makes it unalterable.
- It uses cryptographic techniques.
-It is a peer to peer network that eliminates intermediaries.
-The data on the blockchain is constantly validated.
How do blockchains work?
When a new transaction or an edit to an existing transaction comes in to a blockchain, generally most of the nodes within a blockchain implementation must execute algorithms to evaluate and verify the history of the individual blockchain block that is proposed. If a majority of the nodes come to a consensus that the history and signature is valid, the new block of transactions is accepted into the ledger and a new block is added to the chain of transactions. If a majority does not concede to the addition or modification of the ledger entry, it is denied and not added to the chain. This distributed consensus model is what allows blockchain to run as a distributed ledger without the need for some central, unifying authority saying what transactions are valid and (perhaps more importantly) which ones are not.
With blockchain technology, each page in a ledger of transaction forms a block. That block has an impact on the next block or page through cryptographic hashing. In other words, when a block is completed, it creates a unique secure code, which ties into the next page or block, creating a chain of blocks, or Blockchain.
Conclusion
In my understanding of blockchain technology, its principal strategy was to serve as a system that grants unparallel access to markets, research, and services on the most trusted digital asset platform worldwide.
Bitcoin, Ethereum and other Altcoins started to appear in regular parlance due to their impressive returns. It made some people really wealthy. That in my opinion is not what is interesting about these currencies. What’s interesting is the potential of the technology underlying these currencies.
Finally, blockchain is reinventing the infrastructure that enables us to transact globally, between institutions and in real time. It’s not just about financial sector, it’s going to revolutionize governments, the identity of people and the whole process we used to record transactions. Just as we watched the computer sweep away the typewriter, the blockchain is something we will see for the next decade, changing everything.
For the sake of simplicity, I’ve deliberately left out several features like encryption, cryptography, consensus protocols, etc. We will cover those going forward.
Meanwhile, checkout these helpful resources:
https://www.youtube.com/watch?v=bBC-nXj3Ng4&feature=youtu.be
https://www.ted.com/talks/don_tapscott_how_the_blockchain_is_changingmoney_and_business
