Last updated on October 4th, 2022 at 10:58 am
Many of us have already encountered the term “blockchain technology” but for most people, it’s still a vague term. This technology is considered to be the latest revolution in record-keeping systems and database management.
The finance experts see it as a way to hold the true record of the transactions, and more. They estimate it could save billions of dollars in costs.
As with any other novel technology, there is confusion and even misunderstandings about it.
The goal of this article is to eliminate any uncertainty and help you get a better grip on all things related to this promising new technology.
Let’s start with the basics
Although it may seem complicated at first, the core concept of blockchain technology is fairly simple. It is a type of database, or in other words a collection of certain information that is kept electronically on a computer system.
Similar to much of the technology world, Bitcoin and other cryptocurrencies rely on some form of a database. It allows tracking a huge number of transactions and ensures they are secure. Many of the largest digital currencies opted for blockchain technology as their preferred solution due to these features.
First implemented back in 2009, this technology was designed to contain blocks that house batches of timestamped transactions. Every block links to the previous one via cryptography and as a result, they form a chain.
The growing popularity of cryptocurrencies and the rise of their value around the world has opened possibilities for growing markets, especially those lacking traditional banking infrastructure.
For example, some developing third-world countries have introduced blockchain-based nation currencies.
How does blockchain technology work?
As mentioned earlier, blockchain is a type of database, but it differs from a typical database in the way it stores data. As we know, the information in databases is usually structured in table format. This allows for easier searching and filtering of data.
Spreadsheets can store limited amounts of information, and they enable access either to one person or a small group of individuals.
In comparison to that, blockchain databases are designed to store significantly larger volumes of information. And as a bonus, these databases can be accessed, filtered, and manipulated by any number of users, quickly and easily.
The information in the blockchain is collected in groups or chunks, otherwise known as blocks. These blocks store sets of information and once their capacity fills, they get chained onto the previous filled block. This way, they form a compact string or a chain of data that we know as the “blockchain”.
And the new data that follows enters into a newly formed block. When this block is filled, it will also be added to the chain. This way, the data is chained in chronological order.
Once a well-paid hobby for the early adopters, Bitcoin mining is still a profitable venture. If you are considering making money by Bitcoin mining, to stay competitive in today’s market you need the best bitcoin mining hardware out there.
If you opt for top-rated mining hardware it will protect you from losing a profit and allow you to receive a reward in the form of coins of the cryptocurrency after every block is added to the blockchain.
How secure is this technology?
Advanced cryptographic protection systems make blockchain technology more secure in comparison to traditional banking. The strings of data are stored linearly and chronologically so they are impossible to predict, therefore any tampering with them is easily detectable. You should use a decentralized digital platform like Tron API when dealing with blockchain.
Each block contains its own hash and a timestamp, so it can be uniquely identified, and its integrity can be verified. The linking of blocks keeps the chain secure. It’s also the decentralization that makes this type of database harder to tamper with and retroactively alter the information.
After a new block has been added to the end of the blockchain, it’s very difficult for cybercriminals to alter the contents of the blocks. If they try to change a single copy, the hash code will change, and it wouldn’t align with everyone else’s copy.
A successful hacker attack would require an enormous amount of money and resources. Since the hacker’s version of the copy has different hash codes and timestamps, to make it legitimate 51 percent of the copies of the blockchain would need to be controlled and altered.
This kind of fraud would not only require gigantic costs, it also wouldn’t go unnoticed. The network members with the software installed have a copy of the blockchain that’s constantly updated with new blocks. They would recognize any malicious changes to the blockchain.
New applications for the blockchain technology
Blockchain technology has exploded in popularity in the last few years, especially within financial sectors. It provides a banking alternative, but there are more applications to it. It is an efficient way to secure personal information, especially for persons residing in countries with underdeveloped or unstable governments.
As it happens with most technologies, they grow and evolve, and so did the blockchain. Blockchain 2.0 opened up this novel technology to applications across many other industries. It has the potential to transform social networks, the insurance industry, the legal sector, the food industry, the music industry, and even the land-based casinos.
It could also improve targeted advertising.
The applications of blockchain are practically endless. With its potential to transform products, services, and platforms, and the ability to address a range of security concerns, this smart technology may become one of the essential mechanisms to all businesses.