Blockchain technology – it is trending, and it will be trending, for sure. You probably went across this term at least once in the past couple of years, but you might don’t know what it is. A simple interpretation would say that it is a digital record of duplicated transactions and distributed across the entire network of computer systems on the blockchain. Maybe it sounds complicated, perhaps this field isn’t your cup of tea, but you should find out more about it. Even though there are mixed feelings toward this technology, no one can entirely underestimate its role in the global economic landscape. The reason is quite simple – It is expected that blockchain’s market size will reach 60.7 billion dollars by 2024. If you are not familiar with any of this but you’re willing to find out more, we are here to help you.
Let’s dive into the world of blockchain.
How Does It Work?
For the transaction to be possible, a distributed database offers the feature that all storage devices are not all connected to a typical processor. The chain is constantly growing because of the new ordered records called blocks. Each block has a timestamp and a link to a previous block. Users can only edit the blockchain’s parts by holding the private keys necessary to write to the file. Cryptography ensures that everyone’s copy of the distributed blockchain is synchronized.
4 Principles That Make Blockchain Unique
Corruption Is Not Possible
Every node (basic unit of a data structure) on the network has a copy of the digital ledger (digital system for recording the transaction of assets in which the transactions and their details are recorded in multiple places simultaneously). If someone wants to add a new transaction, every node needs to check its validity. If the majority think it is valid, then it is added to the ledger. This system promotes transparency and makes it corruption-proof.
To put this in simple words: Once the transaction blocks get added to the ledger, no one can go back and change it. Thus, any user on the network won’t be able to edit, delete or update it.
Decentralization And Enhanced Security
There isn’t any governing authority or an individual looking after the structure. Instead, a group of links maintains the network decentralized. Basically, in the blockchain world, users can find themselves in a specific position. As the system doesn’t need any governing authority, we can directly access it from the web and store our assets there.
When there is no need for a central authority, it is impossible to gain personal benefits by changing any network characteristics. Using encryption ensures another layer of security for the system.
Furthermore, decentralization is combined with one more layer of security – Cryptography. A cryptographic algorithm combines a key — a word, number, or phrase — to encrypt the plaintext. The same plaintext encrypts to different ciphertexts with different keys. You could think of it as a unique identification for every data. All the blocks in the ledger come with special keys and contain the previous block’s information. So, changing or trying to mess with the data will mean changing all the key IDs, which is impossible.
All other users on the system control the ledger on the network. This system allows the delivery of the computational power across the computers to ensure a better outcome. This is why it’s considered one of the blockchain’s essential features. Distributed ledger responds well to any suspicious activity or tamper. As no one can change the ledger and everything updates quickly, tracking what’s happening in the ledger is accessible with all these nodes. To be possible for these features to work, every active node must maintain the register and participate in invalidation.
The consensus of algorithms is the reason why blockchain grows. In the blockchain architecture, agreement of algorithms is at its core. Every blockchain has a consensus to help the network make settlements. In simple terms, the consensus is a decision-making process for the group of nodes active on the network. Here, the connections can come to an agreement instantly. It is basically like a voting system, where the majority wins, and the minority has to support it. The consensus is responsible for the network being suspicious. Nodes might not trust each other, but they can believe in the algorithms that run at the core of it. That’s why every decision on the network is a winning scenario for the blockchain.
We would also like to highlight, that transactions using blockchain technology are way faster than using traditional banking services.
Interesting Facts About Blockchain Technology
Mystery Of The Inventor
Nobody knows the identity of the inventor. Satoshi Nakamoto is the pseudonym of the person or maybe people that invent this technology. Despite numerous efforts to uncover his identity, Nakamoto has proven elusive. Several individuals have been proposed but none have been proven to be Satoshi Nakamoto beyond a doubt.
Small Big Numbers
According to the statistics, 77 billion people use the internet. The percentage of them using blockchain in some form by now is 0.5%. It certainly sounds small, but in fact, that is 18,850,000 people.
Blockchain is often connected to Bitcoin. The Bitcoin Network is more powerful than 500 supercomputers working together. Do you know how powerful a single supercomputer is at present? A single supercomputer can process 200 million billion calculations in one second.
Now imagine how powerful the Bitcoin network would be, surpassing 500 supercomputers working together!
Follow The Banks; They Are Never Wrong
Almost 50% are working with a technology company to augment their transaction via blockchain.
Blockchain technology has been around for quite some time now, and it is not hard to say that it will stick with us. We encourage you to hop in the blockchain train and experience the new age of technology.