Blockchain and the future
What is Blockchain Technology?
Blockchain is a digital database system in which information and records of transactions made by cryptocurrencies like Bitcoin are managed across many computers that are connected in a peer-to-peer network. One of the main reasons behind Blockchain being a revolutionary technology is, it reduces risks and stops frauds.
How does it work?
Blockchain can store any kind of data exchange and this is why it is like a Ledger System. The data exchanges are called Transactions and when the transactions are verified as the authentic ones, it gets placed in the ledger system as a block. If you want to understand the working of Blockchain then understanding the concept of Cryptographic keys is a must. When any 2 individuals conduct a transaction online, each one of them has 2 keys: a private key and a public key. To generate a safe digital identity point of location, a combination of both these keys is done.
The Process
Let us label the individuals as A and B. In the beginning, a transaction is made by A, signing it with his private key. Here, the function of the private key is to generate an entirely different signature, ensuring no one in between A and B has the ability to alter it. If any sort of modification in transaction information is tried by C(any other person or anomaly), the digital signature is automatically changed in such a way that no one will be able to identify it, and hence, the fraudulent behavior gets dismissed. After that, the transaction is transferred towards B who is the verifying user. The blockchain then uses several methods to identify the authentication of the transaction and after verifying its validation, the transaction gets placed in the ledger as a block by containing a unique ID, and also a timestamp. The unique ID and timestamp help in keeping it safe from alteration in the future. Then, the block is linked up to other blocks and a new block forms a link with this block. This is how the chain of blocks is created. This is how the Blockchain works.
Advantages of Blockchain
It is transparent
The data in the blockchain is viewable for any person who uses it. The changes made by any person are also publicly viewable which is why Cryptocurrencies use Blockchain because every transaction is recorded in a safe place then viewed to the public.
There is no downtime
This means that the service never stops. Since blockchain is not hosted on a computer but hosted everywhere, the nodes are linked with each other which is why it never has to go through any downtime issues.
Blockchain is Immutable
When you record any transactions of data in the blockchain, there are very few chances of your data being altered or changed. This means to go to your past transactions, you will alter every single block and every single transaction within those blocks.
It is Secure
Blockchain is very secure because it has Cryptographic functions.
If you are wondering about the uses of this promising technology in the real worlds, here you go :
- It is used in recording medical details.
- It is used for Data Sharing.
- It is used in Digital Voting.
- It is used in Land and auto title transfers.
- Immutable Data Backup.
- It is used in Weapons Tracking.
- It is used during the processing of payments and money transfers.
- It is used in retailing loyalty reward programs.
Cryptocurrency
Cryptocurrency is a digital currency or in simple terms; it is digital cash. Cryptocurrency is an internet-based medium where people use cryptographic features to conduct their financial transactions.
Some widely used Cryptocurrencies
Bitcoin(BTC): Bitcoin was built in 2008 and it was the first cryptocurrency ever made. Something very interesting about Bitcoin is, we still don’t have the name of the person who created it. All we know is, they go with the pseudonym; Satoshi Nakamoto. BTC has the largest community of investors and developers. Also, Bitcoin is very simple, even if you’re a beginner, it will be easy for you to purchase Bitcoin because it is supported by all the wallets and top exchanges. Microsoft, Expedia, Overstock, and many other companies have started accepting their payments in Bitcoin.
Ethereum (ETH)
Another most widely used cryptocurrency, launched by Vitalic Butterin in 2015 is Ethereum. According to Buterin, Bitcoin needed a scripting language which is why he went on building this platform with a general scripting language. ETH has succeeded in being the most popular platform when it comes to building smart contracts and they are still considered to be a big thing in the world of Cryptocurrency. Also, the transaction speed of ETH is faster than BTC.
Ripple
Ripple is a unique one because it only focuses on solving complications and problems that are related to the International Payment Transfer industries only. It was launched in 2012. While an International Money Transfer takes one week, ripple can do it within only some seconds. The feels are also comparatively lower than other Cryptocurrencies.
Future of Blockchain
After reading all these, if you are wondering if blockchain is the future, you are not alone. Blockchain is evolving with every new sunrise, just in 2019 the worldwide spending on this platform was $2.7 billion. Blockchain has become widely popular because of its adoption by popular cryptocurrencies like BTC and ETH but many startups of Blockchain in the future are most likely to fail because of its immaturity in implementation. This will lead to disappointment from the users. Undoubtedly, blockchain has many features and might do great in the future too. For example, in health sectors, the use of blockchain can increase efficiency and also improve medical access. The diagnosing can become easier because blockchain allows doctors to facilitate the patients with a better treatment plan. Also, the records of the patients are secured. If blockchain technology is advanced in some years, there are fewer chances of identity theft and other fraudulent behavior in the future. Since blockchain is a strong platform with great features, with its advancement it can grow more in the days to come.
Originally written for Engineering Times