The first time I heard the word “Blockchain,” I thought: “oh! a chain of blocks, like a building.”
I am sure I wasn’t the only one with that idea. However, a blockchain is much more than that; it’s not even physical.
With this article, newbies in the web3 space would be able to understand what a blockchain is and how it works. Are you excited? I am too!
What Is A Blockchain?
A blockchain is a digital record of information or transactions grouped into blocks. A blockchain is encrypted, so that is difficult to alter, manipulate or hack.
So, how does this digital ledger of transactions work?
How Does Blockchain work?
When a transaction is done, its grouped with similar transactions to form a block. Each block is linked together, creating the Blockchain.
A fantastic aspect of the Blockchain is its accessibility. This accessibility makes it transparent. How?
Transactions stored on blocks are shared across connected computer networks. So, anyone who wants to know the details of this public transaction can have access to it.
You cannot alter a piece of information on the Blockchain without changing the entire block and alerting connected networks. A database that multiple participants control is distributed ledger technology (DLT).
Think of your Google Docs; usually, anyone can see the document’s content when a link is shared.
If changes are made, everyone with access can see them. Blockchain is something like this, but with more use and complex technology.
When I first got this, it was an OMG moment. So, I got curious and wanted to know what else is associated with the Blockchain?
Characteristics Of Blockchain
I think the characteristic of a concept or creation is an integral part of its credibility. Let’s take a look at some attributes of the Blockchain.
Transparency- Bye-bye distrust
This is my favourite because it addresses a significant flaw in most business transactions.
Regular businesses or partnerships might have trust issues regarding financial ledgers. Figures can be altered or manipulated.
With blockchains, transactions on the block cannot be altered. If there is an attempt to change it, you would have to modify the connected blocks in the chain.
Also, the Blockchain is public to all connected networks in various locations, called nodes. These networks would be alerted of any chain, and interconnected networks can track the process.
Decentralization- Open to All
Imagine a business enterprise (ABX) that has a headquarter where all client and employee data are stored. This single location controls everything.
So, I have a question for you. Can you imagine what happens if the headquarters gets burnt or hacked?
Well, we all can; that’s where decentralization comes in.
Blockchain decentralization allows different connected networks to have copies of the Blockchain, so there is no “headquarter” or central authority.
If ABX ran on a decentralized blockchain, they would not have to worry about information loss.
Third Parties- No more bank trouble
I must use this medium to say, “I never like making a trip to the bank; It’s exasperating!”
With Blockchain, there is no need for third parties like banks, payment platforms, brokers, etc.
Blockchain financial technology works with a peer-to-peer model.
This transfer model makes it possible to transfer tokens from one person to another instantly.
You cut off expensive bank charges and their associated hassle through blockchain technology.
Anonymity- Who needs ID cards?
Blockchain technology enables you to make transactions without using ID cards or personal details, even your name.
The minimum required is a stable internet connection, a working digital device, and a wallet. Boom! Happy transactions!
So, if you don’t wish to be bothered with filling out long forms and submitting them, you need to consider blockchain-based technologies for your transactions.
Security- An encrypted armored tank
Blockchain technology is designed to be private, even though it’s accessible. Nobody can make alterations easily; this would mean altering the entire chain.
Even if an account was hacked due to the connections in the chain, it could be traced and found. Although the attribute of anonymity might mean you may not get to see the person.
Blockchain technology is quite versatile; with the Blockchain as the foundation of innovation, there is no limit to what can be done.
We can use blockchain technology for so much, and it’s an exciting reality that Web 3.0 brings.
This article is not an exhaustive explanation of all things Blockchain-related, but it’s an excellent start for a newbie.
So, what can Blockchain be used for? My next article will blow your mind with the uses of Blockchain!
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