- It is a Digital, Decentralized, Distributed ledger
- Blockchains are a new data structure that is secure, cryptography-based, and distributed across a network.
- The technology supports cryptocurrencies such as Bitcoin, and the transfer of any data or digital asset.
- The present blockchain ecosystem is like the early Internet, a permissionless innovation environment in which email, the World Wide Web, Napster, Skype, and Uber were built.
How this operates?
- It allows transactions to be simultaneously anonymous and secure, peer-to-peer, instant and frictionless.
- It does this by distributing trust from powerful intermediaries to a large global network, which through mass collaboration, clever code and cryptography
- It enables a tamper-proof public ledger of every transaction that’s ever happened on the network.
- A block is the “current” part of a blockchain which records some or all of the recent transactions, and once completed, goes into the blockchain as permanent database.
- Each time a block gets completed, a new block is generated.
- Blocks are linked to each other (like a chain) in proper linear, chronological order
- Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data
Benefits of blockchain technology:
- As a public ledger system, blockchain records and validate each and every transaction made, which makes it secure and reliable.
- All the transactions made are authorized by miners, which makes the transactions immutable and prevent it from the threat of hacking.
- Blockchain technology discards the need of any third-party or central authority for peer-to-peer transactions.
- It allows decentralization of the technology.
Uses of Blockchain
- Most cryptocurrencies use blockchain technology to record transactions. Example, the bitcoin network and Ethereum network
- Major portions of the financial industry are implementing distributed ledgers for use in banking
- Blockchain technology can be used to create a permanent, public, transparent ledger system for compiling data
- Data can be sales, tracking digital use and payments to content creators, such as wireless users or musicians.