“If you don’t believe me or don’t get it, I don’t have time to try to convince you, sorry.”
– Satoshi Nakamoto, creator of the Bitcoin, the first Blockchain, July 29th, 2010.
Cryptocurrency is currently raging the market and everyone knows about the rise of Bitcoin in the past decade. Bitcoin has falsely become synonymous with blockchain. Bitcoin is a digital currency and Blockchain is the underlying technology. Through this article, we are going to understand the intricacies of blockchain technology and how it is affecting the world share market.
While many nations are promoting the advent of this decentralized monetary system, the world governments are still reeling with the phenomenal progress of digital currency that is ready to replace the existing monetary system. Talks are going on for cryptocurrency regulation and levy hefty taxes for income incurred through cryptocurrency trading but that is a discussion topic for another day.
Overview of Blockchain Technology
As the name suggests Blockchain is a chain of blocks that holds information. The main purpose behind proposing Blockchain technology is to have a system that enables us to store data and documents digitally, where it cannot get tampered with. Simply put, in the initial stage blockchain technology was performing the role of an open-source database.
A blockchain is a distributed ledger that is completely open to everyone. It has an interesting property, once any type of data has been stored inside the blockchain, it becomes almost impossible to change it.
Blockchain technology is the best use of two parts, one part is Block and the other part is Chain. In Blockchain, a block is a structural and functional unit. A block is used to stored data, the hash value of the current block, and the previous block. For linking these blocks, a chain comes into the picture, the chain is made to form a linked structure.
A block has data of transactions or any information we can say, and it also has a hash. A hash value is something like a fingerprint, which identifies a block and all its content, and it is always unique. Whenever we try to make any changes to data inside the block, the hash value also gets changed. Therefore, hashes are especially useful to detect any changes to a block. The third element inside a block is the hash of the previous block. This effectively creates the chain of blocks and makes it more secure.
There is a diverse number of techniques by which the security of the blockchain is ensured. Blockchain is a distributed entity, and this is one of the ways they secure themselves.
Instead, of using the centralized system to manage the chain, blockchains use a peer-to-peer network. When someone joins this network, they get the full copy of the blockchain. If someone tries to create a new block, everyone in the network gets a copy of the new block. Whenever any changes are made to the chain, all the nodes in the network create concur accordingly. They agree about which blocks are valid and those that are not. Tampered blocks will be rejected by nodes in the network. This is how transparency, consistency, and security are maintained in blockchain technology.
Blockchain is a decentralized system. By storing data across its peer-to-peer network, the blockchain instantly removes several risks that come with data being held centrally. Therefore, we can understand that there is not a single structure to store information. As there are many copies of it we cannot target a single structure.
Anyone can view transactions on public blockchains and their source code since these are open-source software. It is also possible to build new applications using the code and suggest improvements to it. Consensus is used to accept or reject suggestions.
It is impossible to alter or change data stored on a blockchain and that’s why Bitcoin has never been hacked. Adding a block of transactions is only possible after a complex mathematical problem is solved and verified by a consensus mechanism. As a result of adding the previous block’s information and key into a formula, every new block has a unique cryptographic key.
4. Lower cost :
Traditionally, you pay third parties like banks to process transactions. With the blockchain, these intermediaries are eliminated and fees are reduced, with some systems returning fees to miners and stakers.
What is the future of Blockchain Technology?
1. Pragmatic Governance Models will emerge:
With the help of blockchain, we will start to see new governance models that enable large and diverse consortia to approach decision-making, schemes, and even payments more efficiently.
2. Centralized Banks will expand with a decentralized mindset:
Centralized banks who are standing as a barrier to the decentralized system will have to admit the stability and transparency of blockchain and the fact that they can expand with the same.
3. Adjacent technologies will combine with blockchain:
Combining adjacent technologies with blockchain will help us to do things that have not been done before. More trustworthy data from the blockchain will better inform and strengthen underlying algorithms. We can expect effective applications of blockchain in health care, voting system, criminal tracking, cybersecurity, and of course transaction transparency.
Other than digital currency, Blockchain technology has various use cases in different domains including but not limited to:
1. Global Healthcare:
As patient information is unique and sensitive, Patient data Management in the medical community needs to be highly regulated. Adopting blockchain technology ensure that patients have full control over their private data and also permission to grant access to specific healthcare providers during emergencies.
2. Digital Identity:
With centralized systems, safeguarding your online presence is increasingly susceptible to possible identity thefts, cyber hacking, and data breaches. As you create your profile, the authority is handed over to the organization’s management and you have little control over what is done with your information. With blockchain technology, the user can control their identity, where and how that information will be utilized.
3. Protection of Intellectual Property:
A blockchain system as a platform in the field of digital ownership will remove the possibility of data infringement, IP asset management, patenting, and other such intellectual property. By adding a timestamp, the origin of an idea can be recorded which cannot be tampered with the inclusion of blockchain technology.
4. Education Industry:
With online learning platforms for local and international students, many institutions provide online courses for students. Blockchain technology will help build better online learning platforms. With real-time, interactive sessions that are consistent for all the students across different locations, for decentralized online learning.
With blockchain technology, it allows payments without any third parties. A banking institution is also involved who has access to user’s personal information which makes the system weaker and costs time and money for the transaction to occur smoothly. With the blockchain platform, there are no third parties involved and only the buyer and seller communicate digitally to deliver the product and accept the payment. There are no additional costs included resulting in a transparent and reliable transaction.
Blockchain technology helps us to keep transparency and trust over the chain we are using for every type of transaction and data storage. Blockchain helps us with marketing benefits. We can target whom we are willing to; there will be no wastage of money. Look forward to knowing more about blockchain technology, cryptocurrency, and more. For emerging technologies courses, you may check CloudThat and explore the best training program to move ahead in your career.
WRITTEN BY Aishwarya Joshi
Aishwarya works as a Research Associate (AWS Media services) with CloudThat. She is an enthusiastic individual and a good team player. A positive attitude is her way of dealing with everything. She enjoys learning new technologies and exploring various ways of problem-solving. As of late, she has become proficient in cloud services and enjoys writing technical blogs.