What is Blockchain Technology?

A digitally growing list of data records is a Blockchain. The blocks of records are interconnected by a technique called cryptography. Each block in this record has a cryptographic hash of the previous block, which is beneficial in exchanging information.

A decentralized, and distributed ledger that stores the records of digital data, which can be stored on Blockchain to be viewed but are not available for any moderation is known as blockchain technology. 

In this blog, we will talk about what is blockchain technology and its uses in-depth.

What is Blockchain and How Does it Work?

A digital database where data is stored and chained together to form a chronological source is known as a blockchain.

For example – When a user shares a Google Docs file with other people, it usually gets transferred or copied, but when someone shares a blockchain, it does not get copied or transferred and it can not be modified once finalized.

The digital assets in blockchain are distributed, not transferred or copied, they only allow real-time accessibility and offer transparency. Any changes that are made in blockchain are documented and that preserves trust. These blockchains are public and are constructed keeping security and prime technology in mind.

Blockchain works by storing data in a ledger which indicates that the information is not from one single source. A component called Node in blockchain refers to every place where the data is stored. 

The following are the essential components of blockchain: 

• Nodes: It is a peer-to-peer decentralized computer network that is responsible for verifying blockchain transactions. It communicates within a network and transfers information about new data which is referred to as blocks. 

• Distributed Ledger: A shared and synchronized database across multiple locations is known as a distributed ledger. Using this component keeps the ledger protected against any kind of hacking and fraud.

• P2P Network: It is a shorthand for peer-to-peer networks and it is used for communication with each other without any mediator, that is, a central server. Using this component makes hacking or any intervention difficult which in turn makes the data more secure.

• Architecture: The overall management system that stores, creates, and manages blockchain data is known as blockchain architecture.

• Cryptography: It is a secure and safe communication technology that enables the user to encode and protect the data is known as Cryptography.

• Private Blockchain: A specific type of blockchain architecture where only a single organization has the authority and full access to the blockchain network is known as a private blockchain. It is essential and useful for organizations that need privacy and prevention from unnecessary leaks.

• Public Blockchain: This network allows anyone to join at any time and does not imply any type of restrictions on who can or cannot have access.

• Consortium Blockchain: It is somewhere in between private and public blockchain because the blockchain is shared with the group and the access is not limited to a single developer, but the control is limited so it is closer to the private blockchain.

How Does Blockchain Technology Work?

An advanced mechanism that allows the transparent sharing of data within a business network is known as Blockchain technology. The process of storing data digitally and in a chronological manner that makes up a blockchain is called Blockchain technology.

Blockchain technology plays a very important role in tokenizing stored assets and helps them get settled on the blockchain. The following are the features of blockchain technology:

• Decentralization: The network does not have any governing authority or one particular person looking after it, rather a group of nodes maintains the network.

• Secure: The network is secure and prevents unauthorized intervention, in order to keep the data safe and transparent.

• Fast Settlement: This method provides faster settlement when compared to any other traditional bank systems. 

• Immutable: This feature does not allow the information to be altered in the network once it is finalized, it can not be modified.

• Consensus: The consensus algorithm makes every blockchain thrive because the architecture is designed flawlessly.

For a better understanding of Blockchain Technology and to excel in the field, you can check out some professional blockchain courses.

Uses of Blockchain Technology

Blockchain is widely used in real-life applications, and to get a better understanding of what blockchain technology is, nothing could be more efficient than real-life examples. Following are a few examples of it:

• Payment Processing: It is one of the most realistic examples of blockchain technology, as it expedites the transfer of money from one user to the other. 

• Digital IDs: Most people face the challenge of identification and Microsoft is currently working to change that by introducing a safe and secure method of identification that will use blockchain technology.

• Data Sharing: Blockchain could be used to share and sell data.
• Copyright Protection: It is no surprise that restricted content is leaked into the world every day. Blockchain technology can help prevent this very problem.

• Real Estate: Blockchain takes the paperwork out of the picture, and in the sector of land, and real estate, blockchain allows a clear picture of the whole process.

• Digital Voting: Blockchain makes the option to vote digitally more feasible as it can use the regulators to verify everything and detect if anything is changed on the network.

• Securing Access: Blockchain networks have the ability to customize according to business or customer needs. You can use blockchain to grant access to your house or anything that you are in charge of.

• Food Safety: It is one of the most important uses of blockchain technology, as the user is able to trace the location and transportation of food until it reaches the final destination.

• Immutable: The data in Blockchain is safe and secure, even more so than in Cloud which is not immune to hacking.

• Medical Records: For record keeping, the medical sector has moved from paper to the blockchain system as it is secure and more convenient than maintaining multiple pieces of patient records.

Difference Between Blockchain and Blockchain Technology

Blockchain Technology	Blockchain
In blockchain, the data is a chain of blocks.	This is a database spread across different nodes.
The blocks are set in a particular sequence.	It is not mandatory to follow the sequence of blocks.
Consensus requires PoW and PoS mechanisms.	No consensus is required and therefore, it is more scalable.
It may use token economy or cryptocurrency but it is not a must.	Token or cryptocurrency is not used.
Many institutes and organizations use Blockchain Technology.	Most of the projects are still under development.

Conclusion

Blockchain is building trust in the digitalfield. It is a form of distributed ledger that helps one or more people to exchange values and information in a digital environment, without having to worry about security. It provides scalability and makes work easier and more efficient. The information is protected and is safer than being on several pieces of paper. People are adapting to blockchain technology at a rapid rate, because of the multiple features and assets that it offers.