WHAT IS BLOCKCHAIN TECHNOLOGY AND HOW DOES IT WORK?
If you’re an aspiring blockchain enthusiast, keep on reading this post as we’re going to take a detailed look at the blockchain technology and its working method.
Though the blockchain technology was conceptualized as a core element of the cryptocurrency Bitcoin, today we can see a significant number of blockchain applications and businesses across the globe are steadily adopting the technology to leverage its full potential. If you’re an aspiring blockchain
enthusiast, keep on reading this post as we’re going to take a detailed look at the blockchain technology and its working method.
1- What’s blockchain technology?
You can think of the blockchain technology as a structure where transactional records of the public are stored in a huge number of databases. These databases are kept in a network connected via peer-to- peer nodes. Each transaction in the digital ledger (the storage) is authorized by the owner’s digital signature that authenticates the transaction and protects it from tampering. This DLT (distributed ledger technology) allows data to be stored on thousands of servers across the globe while letting anybody on the network to see everybody else’s entries in almost real-time. And this makes it extremely difficult for any single user to tamper or gain control of the network. For businesses, the blockchain technology provides the promise of transactional transparency through its ability of creating real-time, secure communication networks to support almost everything — from healthcare data sharing to payment networks to supply chains, and many more.
2- How blockchain works?
As we’ve just learned, a blockchain is a chain of blocks which contains information and every block comes with timestamp, transaction data, and the previous block’s cryptographic hash. The fundamental design of a blockchain may seem simple but this is the thing that makes the technology invulnerable to data tampering. In this open distributed ledger, transactions of two parties are recorded efficiently and securely and because of its distributed nature, a blockchain is managed by a peer-to-peer network simultaneously working together to validate new blocks. As a result, once recorded, the data can’t be updated retroactively modifying all the subsequent blocks, which can only be done with the confirmation from the majority in the network. This is the biggest reason why blockchain technology isn’t vulnerable to hacking.
3- Reasons behind the extreme popularity of blockchain technology
First and foremost, as there’re thousands of nodes scattered all over the world, it’s virtually impossible for a single party to take over the entire network. Secondly, in a blockchain, the validity of a block and its inclusion is decided by an electronic consensus of the scattered nodes. And as there’re thousands of nodes, capturing the network would need a computer with simply impossible power.
However, the blockchain technology is still in its nascent stage. It has only been around since 2009 but we can expect that in the next few years, we’ll see a huge emergence of different blockchain networks and applications. Already, there’re lots of different projects working on advancing the technology to how it can be adjusted or improved for specific use cases. If you’re interested in learning blockchain technology, there will probably never be a better time than now to start learning it and get involved.