Cryptocurrency is the digital currency that most internet users would have come across in this form from blockchain technology. This article is on blockchain technology. It contains some main details of blockchain that everyone should know, like what is blockchain, its popularity and need, versions till now, and some applications. Read this article till the end to get knowledge of blockchain.
What is Blockchain Technology
Blockchain is a technology that has been developed to record information or transactions and prevent them from being hacked. It is a digital ledger for transactions, it is a form of decentralized and distributed ledger that records the digital assets. A ledger is a kind of file that is constantly growing and the transaction is stored permanently in the ledger. It is immutable and chronological. Chronological means the transaction happens one after the other. It is a network that can run anything that can be virtual. It is a very strong technology and is safely secure. It is software that could not be run without the internet.
It is a technology that makes digital currency easy to buy and sell, as it is hard to hack blockchain networks. It made cryptocurrencies work like bitcoin, etc. Blockchain is mainly used for the secure transfer of property, money, etc and it does not include any third party in between like bank or government.
Blockchain Transaction works as steps given below –
- Transaction Request – Firstly the transaction is requested and it can be any transaction like cryptocurrency, records, or other information.
- Broadcast Transaction – Then the requested transaction is now broadcasted to a P2P network using a node.
- Validate Transaction – Now, the transaction is validated using the networks of nodes and the user’s status using an algorithm.
- Add to Blockchain – A new block is added after the transaction is done, and the block is add in the existing blockchain and that will be permanent and unalterable.
Popularity and Need of Blockchain
Blockchain gives a quicker response than other ways in the financial industry. Its settlement process of trades is fast. It does not take a long time and process for verification, settlement, and clearance. This is because it involves a single version agreement of the data available between the stakeholder.
Blockchain is very secure and it uses very advanced cryptography that makes sure the information which is inside the blockchain is secured. In this, each party holds a copy of the original chain which is called the Distributed Ledger Technology.
As we know that blockchain is immutable, so the blockchain can be changed in the public blockchain.
Any transaction or registering of the chronological order of blockchain is unalterable which means in blockchain after a new block is added in the chain, it cannot be removed and modified.
Blockchain technology is secure and certifies, verifies the identity of the interested parties, so that there are no double records, reducing rates.
Collaboration of Parties
The parties in blockchain can transact with each other without requiring any third party involved in between.
In blockchain technology, many transactions happen every minute but there are standard rules for sharing the information or doing transactions between the nodes. And due to the standard, the transaction is validated and all the valid transactions are added one by one.
There are nowadays three versions of blockchain technology. That is Blockchain 1.0 which is made for currency-related works, next blockchain 2.0 is made after the problem scene in the currency like bitcoin, it was upgraded to the smart contract and at latest the version Blockchain 3.0 is enhanced to DApps that is a decentralized application which is a decentralized to peer to peer network and it is a fronted blockchain example of user and code interface written in any language.
Blockchain 1.0 – Currency
Earlier Blockchain technology came for the use of financial transactions that came up with cryptocurrency. The DTL is distributed ledger technology that formed the first application known as cryptocurrency and in this, Bitcoin is the one and first digital currency or cryptocurrency. Bitcoin is a prominent example of this segment.
Blockchain 2.0 – Smart Contracts
Then came the smart contract that is a small computer that lives in the blockchain. It came after the wasteful mining and the lack of network scalability. The smart contract is a free computer program that is executed automatically. And the checked condition for the facilitation, verification.
Blockchain 3.0 – DApps
DApps are the latest version that is a decentralized application. It is an application that has its backend code running in a decentralized P2P network.
Application of Blockchain
Due to the decentralizing blockchain system, our day-to-day life can be influenced extensively. Blockchain system applications are present in every field like hospitals, financial institutions, and the entertainment industry, etc. Some examples of blockchain applications are – cryptocurrency, smart contracts, streamlining supply chain management, media and entertainment, improving governance, record management, and the insurance industry.
Cryptocurrency- Cryptocurrency is a digital currency that is a medium of exchange. With the help of cryptocurrency, our transaction can be possible at any time and take a few seconds.
Streaming supply chain management– it helps in tracking the good’s status through its movement at that time. It improves business outcomes.
Smart contracts- it provides a secure money transaction with encryption. Nowadays it is emerging as a trend in the business world.
Media and entertainment – With eliminating fraud it reduces expenses and protects property rights of contents, etc.
Improving governance– blockchain provides better regulatory oversight to the business and organizations. It makes the voting process secure, efficient, and easy. It makes sure that each vote will be given by the unique I’d, so it can minimize the chances of election fraud.
Blockchain is trending and is a very secure technology. In the future, there is much scope in the field of blockchain. It is more efficient than other transaction technology. It does not involve any third party between the nodes or parties. Bitcoin is the best and the most prominent example of the Blockchain. Future of blockchain in the industry is very large.