Over the past couple of years, there has been so much hype surrounding cryptocurrency in the form of Bitcoin, Ethereum, and others. These digital coins are bought, sold, and traded online by the people. Some people are earning, and others are getting knowledge of investing. However, there is another technology within any cryptocurrency with the help of which all this is possible. This is known as blockchain.
Blockchain is a technical word and may give you an impression that it is a complex technology but it is not. The simplest analogy of blockchain is a unique type of a notebook or a record book, but this time a digital one. However, there is no single place where this notebook is stored. Rather, it is propagated to thousands or even millions of other computers across the globe. This has made it very unconventional compared to books of record that we are used to.
Just imagine that you and your friends keep a notebook where you would write all that you spend money on. Whenever a person incurs expenditure, he records the amount. Nobody will be permitted to delete anything and no one will be permitted to cheat on what they wrote, since each and every person will be able to see and verify what was written. That is the way blockchain operates.
Whenever a transaction makes at least one change such as when John sends bitcoin to Mary that information is recorded by making a record called a block with a group of records. When the said block fills, then it is chained to the last block and a new one begins. These blocks creates a long length of chain over time, this is the reason why we call it a blockchain. After writing something in one of the blocks there is no way to edit or delete it. It goes to permanence. It is visible to all in the network and people can agree that it is true.
So, why did blockchain come into existence? In 2008, a person named Satoshi Nakamoto came out with a different concept to the world, one of a digital money system which does not require a bank. This new system was dubbed as Bitcoin and was made-work with the help of blockchain technology. Until this moment, you would have to use the services of bank or payment company such as PayPal, to make money transfer online, to another person. The bank would investigate your account and they would make sure that you had enough money in your account and then they would authorize the payment.
That has now changed because of blockchain. Individuals can transfer money to one another at will with the use of blockchain, and a bank is not required. This can be as a result of the system itself verifying and validating all the things. Actually, a number of computers which are linked globally are performing the task that in the past banks performed. Such computers are part of a blockchain chain and they collaborate to ascertain the rightness of every transaction.
On sending money via the blockchain system, all the computers on the system are exposed to your transaction. Such computers will pose the question of whether you are having enough money in the digital wallet you had, and whether the very transaction is valid. Your transaction gets added to a blank envelope called block, other transactions that occurred at the same time as you are also added to this block when it's confirmed. The block is subsequently appended to the chain and all the network members update the copy of the blockchain. This entire procedure occurs in a short time with safety.
The other positive attribute of the blockchain is that it is transparent. Each transaction is visible to all people that are using the system. You might not appreciate who transacted the transaction but you can look and see that money was already transacted and the amount of money which was transacted. This assists in gaining trust as there is nothing that is concealed.
Blockchain also has security as one of its parts. The blocks are connected to each other by means of a special kind of code that is known as cryptography. Attempting to alter one of the blocks will cause the code to break and all other members of the network will be able to tell there is a problem. Due to this, it is extremely hard to attack or modify anything in a blockchain system by hackers.
Although blockchain gained popularity as a result of Bitcoin and other digital currencies, it is now discovered by people that blockchain can be used in a wide variety of ways. We can get an example of this in business contracts. In the old, people had to use lawyers and paperwork to come into an understanding of business deals. Smart contracts on a blockchain are now available to people. Smart contract is a program, which executes itself as long as some conditions are fulfilled. As an illustration, an intelligent contract can be used to pay an employee automatically upon completion of a task without the necessity to press a button by any person.
It is also in the testing phase on other aspects such as elections, health care and even farming. In some of these countries, they are in the process of using blockchain to conduct their voting, to ensure that the elections are secure and not compromised. In hospitals, the doctors have an option of using blockchain to keep the records of patients in a manner that will never be lost and never be able to change. In agriculture, companies are using the block chain to trace the food since the farm up to the store to ensure that customers have a good eating experience since their foods are clean and safe.
Even when it comes to education, blockchain could store certificates and the records of schools. It implies that there can be no false credentials or fabrication of the qualification reports since the data remains secure and immutable on the blockchain.
The big issue with blockchain though, is that it consumes a lot of energy. The system can consume a lot of power because many computers are processing transactions simultaneously trying to verify them. In addition, certain blockchain networks become sluggish when a large number of users attempt to access them in a determined timeframe. However, its development and engineers work on it day by day to improve this and to speed it up.
Overall, blockchain is a cool and active technology that is reshaping the way things are being performed. Although it might appear to be a complex matter when first heard of, the simplest concept is that it is safe and honest as far as recording and sharing information is concerned. Be it money, business, voting or education, blockchain is making people able to do things and not require complete trust in a particular company or individual.
As the community becomes aware of the blockchain and its mechanisms of operation, we will start seeing even more applications of it in our everyday life. The realization of the digital future is the only way to be a part of the future and it is the future where the building of trust lies within the system and nobody has to fear participating in it. That is the reason blockchain is beautiful.