What is a Blockchain? - Uncovering The Concept Of Blockchain Technology

Whenever you explore the concept of digital currency, you come across the term blockchain. Well, if we have to explain this term in simple words, it means the public ledger of the digital currency transactions. This technology is currently being used to verify the digital currency transactions. Let us explore this concept in detail here.

The Perception Of A Blockchain

When we talk about a blockchain, then we can even define it as a digital ledger that is incorruptible. Most people believe that the blockchain is meant to record the financial transactions, but the truth is that it can record anything that holds value. If you have to perceive the concept of a blockchain, then you can perceive it as a spreadsheet that gets duplicated across a computer network. What you need to remember is that the information which exists on the blockchain is shared and it does get reconciled on a regular basis.

What is important to remember is that this information exists in encrypted form on the blockchain. The centralized version of information does not exist on a blockchain. This is why it becomes a lot more difficult for a hacker to get access to this information. The blockchain tends to have this built-in robustness and does not have a single defined point of failure.

Understanding The Digital Currency Blockchain

Now, the cryptocurrency transaction means what a user decides to spend in a transaction. The private and the public keys are stored in the digital currency wallet. The wallet interacts with the blockchain so that the users can send and receive cryptocurrencies with ease. The wallet also contains the address to which you can send the cryptocurrency. All the digital currency transactions get verified and recorded on the blockchain. The blockchain records how much bitcoin transfers took place.

The transactions are not sent randomly across the blockchain. What happens is that the transactions are first added to a block, and then the block is added to the blockchain. The transactions are created in the specific system by the nodes. The nodes ensure that the transaction data maps up to the record that exists on the blockchain.Currently, a lot of computing power is involved in maintaining the integrity of the Bitcoin Blockchain. This is why it is no longer an easy job to take over a blockchain because a lot of resources will be required for this activity.

What is worth appreciating about the blockchain is that it is quite secure. The cryptography is used for securing the blockchain. Every block that is introduced on the blockchain has a cryptographic hash of the previous block. Every block on the blockchain has the transaction data and timestamp of the previous block. The design of the blockchain is such that it resists the data modification and this is one of the reasons that data on the blockchain can be termed as secure.

Tracing The History Of The Blockchain

Satoshi Nakamoto was the first person to present the concept of the blockchain way back in 2008. Nakamoto introduced the blockchain as a component of digital currency. The Bitcoin made use of the blockchain for addressing the double spending problem without the need of a trusted authority.

Slowly and gradually the concept of the blockchain refined. Way back in 2014, the bitcoin blockchain file size was able to reach about 20 GB. In 2015 the size of the bitcoin blockchain increased to about 30 GB. By 2017 the size of the bitcoin blockchain had increased to about 50 GB and eventually 100 GB. The interesting part is that Nakamoto had perceived block and chain as two separate terms, butthe concept became popular as blockchain.

Looking At The Benefits Of The Blockchain

The blockchain technology has introduced several benefits since its inception. It offers cost-effectiveness and traceability for supply chain management. The truth is that a blockchain system can significantly contribute to quality assurance. For example, if an irregularity is identified, then a blockchain can play a useful role to identify the origin of the irregularity. The blockchain technology has promoted the concept of smart contracts.

The smart contracts can be signed and validated automatically. After exploring the details of the blockchain, you need to keep an important aspect in mind. To benefit from digital currency investments it is essential to grasp the core concept of the blockchain. Once you understand this concept, it will become much easier to understand the intricacies related with cryptocurrencies. It is also important that you should be well-versed with the advancements in the field of blockchain technology. This awareness will also benefit you in the long-run. The truth is that blockchain technology is here to stay and will make a difference to different sectors. 

It is time financial experts and technology gurus sit together to identify how they can use this technology more productively.