Blockchain is the technology behind Bitcoin and other cryptocurrencies. It’s simply a chain of blocks and every block has some information stored in a public database within the chain. It is the digital platform that’s intended to create faster, more efficient ways to transmit, receive, and track orders using secure data.
It is the act of linking blocks into a chain that makes the information stored on a blockchain so trustworthy. Once the data is recorded in a block it cannot be altered without having to change every block that came after it, making it impossible to do so without it being seen by the other participants on the network.
How does Blockchain work?
When a block stores new information, it’s added to the blockchain. Blockchain consists of multiple blocks strung together. In order for a block to be added to the blockchain, there are four things must happen:
- A transaction must occur.
- That transaction must be verified.
- That transaction must be stored in a block.
- That block must be given a hash.
When that new block is added to the blockchain, it becomes publicly available for everyone to view. If you take a look at the Bitcoin blockchain explorer, you will see that you have access to transaction data, along with information about the block was added to the blockchain.
Is Blockchain secure?
Blockchain technology resolved the issues of security and trust. it always stores the new blocks linearly and chronologically. That they are always added to the end of the blockchain.
After a block has been added to the end of the blockchain, it is almost impossible to go back and alter or edit the contents of the block. That’s because each block contains its own hash, along with the hash of the block before it. Hash codes are generated by a math function that turns digital information into a string of numbers and letters. If that information is edited or altered in any way, the hash code changes as well.
What are the practical applications of blockchain?
Blocks on the blockchain are not only limited to store data about monetary transactions, but it is actually a pretty reliable way of storing data about other types of transactions like:
- Cryptocurrencies
- Smart Contracts
- Banks
- Healthcare
- Property Records
- Supply Chain
- Voting
Why use a Blockchain?
Blockchain technology offers new tools for authentication and authorization in the digital world that eliminate the need for many centralized administrators. As a result, it enables the creation of new digital relationships, and soon enough everything will move to the blockchain technology, starting from governmental operations to businesses and day to day use of the cryptocurrencies, and nowadays some businesses and even countries have already started to adopt and implement blockchain technologies in their systems.