Digitalization has shrunk the world into a small global village. As the world is moving at a faster pace, most of the transactions or tradings are taking place with the virtual money. The theft of information is a serious threat and misuse of the information has also swelled up to greater heights in this digital era.
Blockchain is a key technology for the enhancement of security in this digital era!
Let’s take a dive into the astounding Blockchain technology…
What is Blockchain?
“Blockchain is a decentralized ledger, for securing monetary transactions, valuable data, measurement values, contracts, or agreements that have been agreed upon- which can be accessed only by the registered users.”
To put in simple terms, blockchain is just a chain of blocks that connects information securely by creating a “Hash” for every single transaction made by the authorized user. These hashes help in identifying a block and all its fed contents are always unique; just like a thumbprint. They have an interesting property, once the list of records is fed inside, it is impossible to alter/modify or delete it. It is a distributed ledger that is completely open to anyone with authentication.
How do Blockchains work?
Blockchain is a type of digital notebook which has the record of every transaction/information fed in them. Each successful transaction generates a “Hash” (Hash-A hash is a mathematical function, it is made of a string of numbers and letters ) and after approval of a certain number of authentications, a newly created block is added to the chain of blocks. As soon as the block is updated, it cannot be changed. You can Only add new transactions to the prevailing blockchain. The registry is updated on all authorized computers and networks at the same time. Thus it is impossible to forge it.
The Blockchain automatically updates itself once every ten minutes whether the transactions are taking place or not. No human assistance or central computer system instructs the computers for updation.
A simple analogy for understanding blockchain technology is Google sheet. When we create a sheet and share it with a group of people, the document is neither copied nor transferred. It just gets distributed. This is a decentralized distribution chain that allows authorized users to access the document at the same time. All modifications to the blockchain are a tiny bit similar to google sheets, which are being recorded in real-time, making changes completely transparent and accessible only to authenticated users.
Why is the blockchain beneficiary?
- Transparency: Transactions histories are visible to every registered user.
- Security: Each and every hash is unique, even if one or two blocks are hacked the complete chain cannot be hacked and also it updates to all users at the same time, which makes it impossible to hack.
- Traceability: Every new or prevailing transaction can be traced, verified when needed.
- Enhanced speed and efficiency: As blocks are automated, it is not prone to human errors and it is way far better than traditional bookkeeping and ledgers.
- Reduced costs: It doesn’t involve third parties or a middle man, so it reduces human costs and other essentials for traditional information storage management.
Blockchain is an amazing yet confusing technology!
It is the future of digitization and it is becoming inevitable when it comes to securing data and information.
