Blockchain is a decentralized and distributed database that stores information electronically. The structure of data is what separates Blockchain from other databases. After the use of Blockchain in bitcoin and other financial services markets, this technology became immensely popular.
In the simplest words, blockchain offers a list of transactions that users can view and even verify without the interference of third parties. The need for middlemen like banks or agents is not necessary with the use of Blockchain. Moreover, this technology is gaining so much momentum worldwide and is one of the most popular financial services.
Secure payments can be made between two users who do not even know each other without any external verifier. Apart from cryptocurrency, this wonderful technology helps in enhancing the accuracy of medical records and is beneficial for other industries as well. Keep reading if you wish to get a better understanding of Blockchain.
What is Blockchain?
Think of this technology as a database that stores data digitally. It can store blocks of data together and then chains them together to establish a single source of data. Users can view the records or transactions but no changes can be made to them. Instead of copying or transferring, the distribution of digital assets takes place.
Due to the decentralized assets, everything is transparent to the users. This revolutionary technology allows people to share data even if they do not trust or know each other. As the name of the technology suggests itself, each chain consists of multiple blocks. Every time a new transaction is made, the details of this transaction add to the participant’s ledgers.
If there are changes in one block of the chain, it indicates that someone was altering the blockchain. For corruption to occur, every block in the chain should change across all versions of the chain. As soon as blocks keep adding to the chain, the system becomes more secure and efficient. Blockchain networks can monitor payments, track orders, manage accounts and much more.
Types of Blockchain
Users can manage ledgers on the network easily because of several types of blockchain. Here are some main types of blockchain:
Public blockchain
The first type of blockchain is public which is immensely popular because of cryptocurrency. Information is not present at any one place in the public blockchain. Rather, they distribute the data on several networks. There are no restrictions in this type of blockchain and users do not require permissions as well.
Private Blockchain
Blockchain networks that have restrictive environments are private. Although this type works on decentralization, such blockchains are for smaller levels. There are authorization settings and permission levels for these blockchains. Also, they are commonly known as enterprise blockchains.
Hybrid Blockchain
The combination of public and private blockchain is known as the hybrid blockchain. With this type of technology, you can decide whether you want people to have access to the data. You can set restrictions for some users while others will have a permissionless system.
Importance of Blockchain
There is much more to blockchain than just record-keeping. Since this technology offers greater security, the risks of fraud drop down drastically. Here are some features of blockchain technology.
- With blockchain, you can track and verify multiple steps transactions. Along with secure transactions, you can speed up the entire process of data transfer. From voting sites, healthcare industry to managing titles, the technology has solutions for everyone. Remember that if a transaction occurs then you cannot modify it.
- Amidst online frauds and hacking, Blockchain technology develop a sense of trust among the users. The entities who wish to share their transactions without the involvement of a third party should use this technology.
- This marvel technology can majorly cut costs of the company without compromising on the quality of their services. Since the middlemen are gone now, you do not have to pay extra to them. Manual processes are slow and take up a lot of time during transactions but this is not the case with blockchain. When it comes to speed, this technology beats other modes or processes.
- Transparency is another factor that contributes to the huge success of Blockchain. Tracking the origin of various products is now possible. Identify frauds easily with this feature to ensure a fair procedure. All you have to do is trace back the items to find evidence. Be in control of your digital freedom so you are not answerable to banks, third person or any other authority.
Final Words
Blockchain technology is here to stay. There are a few challenges in the way of this technology but it is extremely important for organisations. Businesses are slowly starting to adopt blockchain and it is a matter of time before every company starts utilising this technology. Blockchain is certainly the future!
