Who knew that a single idea thought in 1991 and implemented almost 2 decades later could revolutionize the world. A simple yet complicated chain of commands has led to the emergence of a currency nearly impossible to hack. This information is left free and does not operate by any authorized community or central organization resulting in full transparency giving security to all personnel involved.
At some point in your life, you might have heard about the word ‘Cryptocurrency’. A virtual currency formed in 1991 which records all your transactions in the form of a blockchain and allows the movement of different purchases without keeping an actual balance.
All the cryptocurrencies in the world such as bitcoin, ethereum or ripple work are based on blockchain. Once you understand the blockchain development process, the whole concept will be transparent. This has surely changed the way mankind used to transact among themselves and this journey of a decade is unprecedented.
Let’s check out some key features to understand better:
What is Blockchain
If you are somewhat related to this concept or have researched this currency for personal uses, this term has crossed your way.
Blockchain, as the name suggests, is a chain of blocks. This statement seems simple which is not the case. When we talk about the words ‘block’ and ‘chain’ it means information which is stored in the form of blocks and is carried or connected by chains. These blocks contain small pieces of information which are connected by chains and held together.
Blockchain can also be defined as a ledger which holds all the relevant information of transactions. Whether the transaction is done through bitcoin, ethereum or any other virtual currency. Blockchain holds the record of every currency through which transactions can take place. Since a lot of information is carried through this platform each block has designated a hash through which every block is identified. Each block has its unique hash which makes it different from others.
How does Blockchain work
Blockchain application includes one of the most complex mathematical equations. Blockchain holds all the confidential information and is one of the most well-maintained systems of this generation. There exist a lot of complicated scenarios in working of this system, but let’s simply understand them:
- Once a transaction is made by an individual, the transfer of possession of coins(say bitcoin) is initiated. This transaction needs to be updated on the blockchain to make it more protected and authorized.
- This authorization of the transaction is done by miners. Mining can be defined as a process where miners use heavy computer software and run a complicated mathematical problem generated with the help of hashes.
- Miners update and authorize each transaction before adding it on the blockchain indicating it to be completely safe and secure. Once transactions are successfully checked and verified, they get added in the form of blocks and constitute a part of the blockchain.
Benefits of Blockchain
Blockchain is used by millions of people worldwide. As a result, it attracts a ton of traffic. Since so many clients are part of this daily, it might have some benefits which are not fulfilled by any other platform. Below-listed is some of the major benefits:
- Safe and Secure Network: Blockchain is considered to be one of the most secure networks for any transaction to take place. Since the data has been verified by a network of computers it makes it nearly impossible to get the hack. Whenever any block gets added to the chain, the copy of it gets recognized in every single computer which is trying its hand on solving equations. Since the backups are in such a large number, hacking any one computer won’t help at all.
- No intermediaries: This is one of the best Blockchain application tools. Since there are so many networks connected there exist only smart contracts. Smart contracts mean all the digital contracts which can be used as a platform to run any application. These contracts are not authorized by the department and hence are independent. These contracts work along with some certified terms and conditions and run on their own. Late fees, scheduling payments and stolen information are some of the obstacles which are removed by this feature.
- Speed and Efficiency: There is no doubt that Blockchain is extremely efficient. Since there are no third parties involved all the information gets transferred through verified sources and in just a matter of time. A normal stock exchange might take 5–6 days to complete the transaction due to heavy paperwork and formalities but these barriers do not come in blockchain and exchanges can take place instantly.
Application of Blockchain
Blockchain cannot be used to perform a specific activity. In simple words, blockchain is very much similar to the Internet. The internet nowadays is used for messaging, gaming, contacts etc. Similarly, Blockchain is used for several functions. The blockchain development process will go forever and yes all these functions are used worldwide.
- Cryptocurrency: This is the primary aim for which blockchain came into existence. Over time cryptocurrency has now become a standard mode of payment and can now be used in restaurants and clubs. This has certainly revolutionized the payment method. and can even be used to buy your Amazon products. Cryptocurrencies like bitcoin, litecoin, ether and ripple are often used to transact goods and services.
- Trade: This platform has given a massive boost to trade contracts between countries. Often payments get stuck between foreign industries due to several reasons. With blockchain, the need for intermediaries is gone and secure payments can take place in a couple of clicks.
- Energy: This is one of the newest treasuries showing rapid growth. Besides energy plants and large setups like a windmill, another form of energy can be seen in the form of solar panels. Households have equipped solar panels at their roof and often gets benefited with this energy. When these solar panels generate excess energy(more than they require), people can actually sell the excess energy in their neighborhood. A company in Brooklyn named ‘LO3 Energy’ is experimenting on how to transfer the energy locally through blockchain. Since it’s easier to distribute power locally several costs including intermediaries and power outrage can can be prevented.
- Personal Identity: It comes as no surprise that your identity might get stolen some day. It takes just one natural calamity to bring your documentation into ruins. A flood often takes away your home so a couple of papers kept in your drawer is a piece of cake. When entering your credentials into blockchain records, not only it protects your identity it also makes it less vulnerable. You can easily accept payments using your public key and transactions can be done in a smoother manner.
- Supply Chain: Let’s admit that transferring goods is challenging. Not because the size of shipment is large or commuting is hard, but because tons of documentation is waiting for you to steal from your pockets. If supplying internationally, custom duties and intermediaries is a huge pocket eater. Blockchain allows all the parties involved the right to access the required documentation and can even view the status of transportation in real time eliminating the need of mediators.
Blockchain is seriously changing the way we interact within us and is sure uplifting the innovative use of resources. The above-mentioned information is just the tip of the iceberg and there exists so much to talk about. This platform is something worth putting your dollars in.
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