Basics of Blockchain that you should know
Blockchain is a word buzzing a lot in the IT industry. You must have heard IT professionals frequently saying that they work on blockchain. Even several IT professionals have no exact idea of what this blockchain is? So, if we are hearing this word so often, it’s the need of the hour to know the basics of the blockchain. Let’s start with some history of the blockchain.
History of Blockchain
The blockchain is an unquestionably innovative creation — the discovery of an individual or a group of individuals called as Satoshi Nakamoto. From that point forward, it has developed into something more prominent. Originally the blockchain technology was created for the digital currency (Bitcoin). However, other potential uses of it have been found by the tech community. That’s why we can see everyone asking a basic question: What is Blockchain? So, let’s address it.
What is blockchain?
Blockchain is nothing but a system which maintains a record of several databases across several computers that are connected in a peer-to-peer network. These data (block) are secured and bound to one another using cryptographic principles (chain), so the name ‘Blockchain’.
Here’s a simple example to explain the blockchain — Everyone’s laptops in a team are linked to each other’s laptops. There is a XL sheet on which all the team members can work on. When the members work on the XL sheet, everyone’s XL sheet will get synchronized and updated. This is known as blockchain.
How blockchain works?
The blockchain is quite simple but creative way of carrying information from A to B in a completely automated and safe manner. One party starts the process by creating a block, which is verified by probably millions of computers distributed across the net. This verified block is added to a chain, which is stored across the net, thereby forming a unique record with a unique history. Misrepresenting a single record would mean faking the whole chain in millions of instances, which is practically not possible.
Example:
When we want to book railway tickets, we buy those on a railway company app or website. If we pay by a credit card, the credit card company charges you to process the transaction. In this case, blockchain can help the railway operator to save the credit card processing fees and it can also move whole ticketing process to the blockchain. Here, the transaction occurs between railway company and the passenger, who are the parties. The ticket is a block that will be added to a ticket blockchain. The transaction on the ticket blockchain is a unique, autonomously verifiable and unfalsifiable record. Parenthetically, the final ticket blockchain is also a record of all the transactions for a specific railway route, or even the entire railway network, including each ticket ever sold, each journey ever taken.
However, here the key is that ‘it’s free’. Blockchain can transfer and store money as well as it can substitute all processes and business models that depend on charging a small amount of fee for a transaction.
Blockchain Technology : a Democratized System
Basically, blockchain is a distributed storage rather than a centralized storage. It is a shared and absolute record, which makes it open for anyone to see making it a democratized system. Therefore, anything built on the blockchain is transparent and everyone participating in it is responsible for their actions. Ultimately, blockchain technology is a system built by the people and for the people.
Why blockchain has earned so much of appreciation?
· Blockchain isn’t possessed by a single entity, as a result it is decentralized
· The information is cryptographically stored inside
· The blockchain cannot be changed, so nobody can mess with the information inside the blockchain
· The blockchain is transparent, so anyone can follow the information if they need to
I hope, you got the basic idea of blockchain. In the next article, we’ll dig little deep into it and see the chief properties of the blockchain.
Cheers!!!
