By definition, Blockchain is continuously growing list of records (blocks), which are linked to each other and secured using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data.
As blocks each contain information about the block previous to it, they form a chain, with each additional block reinforcing the ones before it. Hence by design, blockchains are resistant to modification of their data because once recorded, the data in any given block cannot be altered retroactively without altering all subsequent blocks.
A blockchain is a globally shared, transactional database. This means that everyone can read entries in the database just by participating in the network. If you want to change something in the database, you have to create a so-called transaction which has to be accepted by all others. The word transaction implies that the change you want to make is either not done at all or completely applied. Furthermore, while your transaction is being applied to the database, no other transaction can alter it.
Furthermore, a transaction is always cryptographically signed by the sender (creator). This makes it straightforward to guard access to specific modifications of the database.
Process of Transaction
One of Blockchain technology’s cardinal features is the way it confirms and authorises transactions. For example, if two individuals wish to perform a transaction with a private and public key, respectively, the first person party would attach the transaction information to the public key of the second party. This total information is gathered together into a block.
As mentioned earlier, this block contains a digital signature, a timestamp, and other important, relevant information. It should be noted that the block doesn’t include the identities of the individuals involved in the transaction. This block is then transmitted across all of the network’s nodes, and when the right individual uses his private key and matches it with the block, the transaction gets completed successfully.
Blockchain technology has made a great impact on society, including:
- In the area of politics, Blockchain is being looked at for bringing in source of funding for political parties.
- Blockchain technology can create a decentralised peer-to-peer network for organisations or apps like Airbnb and Uber. It allows people to pay for things like toll fees, parking, etc
- Blockchain technology can be used as a secure platform for the healthcare industry for the purposes of storing sensitive patient data. Health-related organisations can create a centralised database with the technology and share the information with only the appropriately authorized people.
- Bitcoin, Blockchain’s prime application and the whole reason the technology was developed in the first place, has helped many people through financial services such as digital wallets. It has provided micro-loans and allowed micro-payments to people in less than ideal economic circumstances, thereby introducing new life in the world economy.
- Most cryptocurrencies use blockchain technology to record transactions.
- NFT market has gained significant momentum in past couple of years and it’s gaining even more momentum in 2021.
- Global market leaders like Maersk, IBM have joined hands together to develop block chain based platform to explore and tap opportunities of using the technology and bringing in the value for the customers.
Blockchains can be set up to operate in a variety of ways, using different mechanisms to secure a consensus on transactions, seen only by authorized users, and denied to everyone else. Bitcoin is the most well-known example that shows how huge Blockchain Technology has become. Judging by its success and increased use, it seems that Blockchain is poised to rule the digital world of the near future.