How Blockchain Technology Works and Why It Matters
Did you know there are over 40 million people worldwide today who actively use Blockchain technology? And that amounts to 0.5% of the world population? Yes, you heard it right! Being a secure, fast, reliable, and transparent digital technology, Blockchain is revolutionizing the tech world like never before, and transforming businesses across industries. As per a recent report by MarketsandMarkets™, the Blockchain market is estimated to reach a massive US$67.4 billion, globally, by 2026. So, if you are a Blockchain enthusiast, be ready to explore the technology in depth, know how it works, and why it is emerging as a powerful technology in the digital landscape! Let’s get started
What is Blockchain Technology
Blockchain is a revolutionary digital technology that is gaining importance due to its unmatched capabilities to reduce risks, and frauds in a scalable manner. Blockchain technology is a peer-to-peer, distributed /shared ledger that is decentralized and accessible to everyone participating in the network. The access is distributed without involving any single entity or a third-party intermediary. Once recorded, the digital assets cannot be changed thereby promoting transparency and security in the ecosystem.
Blockchain Technology: How it Works
As discussed above, Blockchain technology is a shared ledger that allows multiple connected servers or computers to securely maintain, and manage a single, immutable ledger. It performs user transactions where no third-party intermediaries are involved.
The question that arises now is — How does Blockchain Work? How can you perform user transactions on a Blockchain?
The answer lies here — You need to have a wallet to perform transactions on a Blockchain.
What is a Blockchain wallet?
It is a program that permits you to use Crypto-currencies such as Bitcoin, Ethereum, Dogecoin, etc. Cryptographic methods,i.e., public keys and private keys, secure your Blockchain wallets so that you can have complete control over your unique transactions. Nobody can access yours owing to the security protocols provided by Blockchain technology.
Technical Steps: How Blockchain Works?
As a participant in the network, while you initiate a transaction in the Blockchain, the latter accumulates the entire transaction data and incorporates the data into a block. The block is acting here as a container for the data concerned. Thereafter, once the block gets ready to process, it undergoes an encryption process. The process entails the conversion of data present in the block into a unique, hexadecimal number which is termed a ‘Hash’. The ‘Hash’ created is then incorporated into the header of the block that follows, and a chain of blocks gets created eventually. In this chain created, each block consists of a reference to the former block via the ‘Hash’. The entire process leads to enhanced immutability and security in the system which prevents tampering with the transaction history.
Why Blockchain Matters
Blockchain technology is not just a Cryptocurrency. It is used to bring security and reliability to the ecosystem in all industries like healthcare, retail, manufacturing, supply chain management, etc. You can be sure to trace the origin as well as the journey of products, can access real-time data thereby bringing transparency and preventing frauds and errors. Your records are safe and secure. Data privacy is maintained. Furthermore, Blockchain technology facilitates Smart Contracts that eliminate intermediaries leading to cost reduction benefitting end-users.
Bottomline
Blockchain technology is redefining conventional processes in all industries. It offers transparency, security, efficiency, and a huge cost reduction driving organizational goals.