Blockchain is a term often connected to bitcoin and other cryptocurrencies. It is a shared global infrastructure that is so enormous and powerful. It is circulated widely, but understood poorly. But what really is it? This article will give you an informative and easy way to understand blockchain especially if you are a total beginner about it.
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Blockchain is defined as a digital ledger that keeps a record of all transactions that take place across a peer-to-peer network. It is a technology best known for enabling the existence of cryptocurrencies like bitcoin. It works by confirming transactions like fund transfers, trades, voting, etc. without the need for a central certifying authority.
Blockchain may be public or private. A huge amount of it is public and nodes everywhere have copies of what the blockchain is supposed to be. It is decentralized, meaning there’s no need for any central, certifying authority. But the financial industry is proposing a new blockchain that are so called ‘private’ wherein encryption is used to verify transactions and keep information on the blockchain. In this blockchain, every occurrence is recorded and the record cannot be altered.
The Connection of Bitcoin and Blockchain
According to IBM, bitcoin which debuted in 2009, is considered the first blockchain. Bitcoin’s popularity as a decentralized system that will revolutionize money and government has launched the blockchain industry. Bitcoin was designed to be public and allow anyone to join. The bitcoin blockchain is designated to replace the need for a central authority with rules and incentives that would keep its users honest. It consists of a digital ledger that records all transactions from the beginning of time to the present. This is to make sure that theft wouldn’t pay since rewriting the digital ledger would need a lot of computational power that it would be too costly.
The Use of Blockchain
Blockchain can be used for the transfer of currency and share of contracts, records and all other kinds of data across multiple providers without the risk of a privacy breach. In automotive, users could use blockchain to manage fractional ownership in autonomous cars. Through blockchain, financial services will improve transparency and provide faster, cheaper settlements that could shave billions of dollars from transaction costs. The voting process may also take advantage of a blockchain code. Constituents could cast votes via smartphone, tablet or computer, resulting in immediately verifiable results. In healthcare, patient’s encrypted heath information could be shared with multiple providers without the risk of privacy breaches.
The Future of Blockchain
Private and public blockchains are speculated to co-exist in the future. Governments will begin to realize the potential of blockchain technology. Banks will file patents and build internally on blockchain tech. It is reported that the Open-Ledger Project of Linux Foundation will begin to facilitate the evolution of blockchain technology. In other words, blockchain hype will not die.