What is Blockchain?
BLOCKCHAIN can be defined as a chain of blocks that contains information. In this technique documents are in digital format so that it’s not possible to backdate them or alter them. The purpose of blockchain is to solve the double records problem without the need of a central server.
The blockchain is used for transfer of items like money, property, contracts, etc. and it is secured. It does not require a third-party like bank or government. Once data is recorded inside a blockchain, it is very difficult to change it.
The blockchain is a software protocol (like SMTP is for email). However, Blockchains could not be run without the Internet. It is also called meta-technology as it affects other technologies. It is comprised of several pieces: a database, software application, some connected computers, etc.
Sometimes the term used for Bitcoin Blockchain or The Ethereum Blockchain and sometimes it’s other virtual currencies or digital tokens. However, most of them are talking about the distributed ledgers.
What Blockchain is NOT!
Blockchain is not Bitcoin, but it is the technology behind Bitcoin.
Bitcoin is the digital token and blockchain is the ledger to keep track of who owns the digital tokens.
You can’t have Bitcoin without blockchain, but you can have blockchain without Bitcoin.
Let’s study the Blockchain architecture by understanding its various components:
What is a Block?
A Blockchain is a chain of blocks which contain information. The data which is stored inside a block depends on the type of blockchain.
For Example, A Bitcoin Block contains information about the Sender, Receiver, number of bitcoins to be transferred.
Who is Using Blockchain Already
Bitcoin is the most well-known example of blockchain technology, but it is joined by a growing number of early adopters. For example, Google, Goldman Sachs, Visa, and Deloitte are investing in blockchain projects. And businesses working on blockchain based services include:
- Spotify, to manage copyrights.
- IBM, to build a tracking tool for shipping companies and retail chains.
- Eastman Kodak, to create storage for stock photos.
How Blockchain Transaction Works?
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Step 1) Some person requests a transaction. The transaction could be involved cryptocurrency, contracts, records or other information.
Step 2) The requested transaction is broadcasted to a P2P network with the help of nodes.
Step 3) The network of nodes validates the transaction and the user’s status with the help of known algorithms.
Step 4) Once the transaction is complete the new block is then added to the existing blockchain. In such a way that is permanent and unalterable. Also read: Top 10 Programming Languages for Kids to learn
Why do we need Blockchain?
Here, are some reasons why Blockchain technology has become so popular.
Resilience: Blockchains is often replicated architecture. The chain is still operated by most nodes in the event of a massive attack against the system.
Time reduction: In the financial industry, blockchain can play a vital role by allowing the quicker settlement of trades as it does not need a lengthy process of verification, settlement, and clearance because a single version of agreed-upon data of the share ledger is available between all stack holders.
Reliability: Blockchain certifies and verifies the identities of the interested parties. This removes double records, reducing rates and accelerates transactions.
Unchangeable transactions: By registering transactions in chronological order, Blockchain certifies the unalterability, of all operations which means when any new block has been added to the chain of ledgers, it cannot be removed or modified.
Fraud prevention: The concepts of shared information and consensus prevent possible losses due to fraud or embezzlement. In logistics-based industries, blockchain as a monitoring mechanism act to reduce costs.
Security: Attacking a traditional database is the bringing down of a specific target. With the help of Distributed Ledger Technology, each party holds a copy of the original chain, so the system remains operative, even the large number of other nodes fall.
Transparency: Changes to public blockchains are publicly viewable to everyone. This offers greater transparency, and all transactions are immutable.
Collaboration: Allows parties to transact directly with each other without the need for mediating third parties.
Decentralized: There are standards rules on how every node exchanges the blockchain information. This method ensures that all transactions are validated, and all valid transactions are added one by one. Also read: The Top 10 In-Demand Tech Skills you need to have in 2021
Blockchain Use Cases
Blockchain Technology is used widely in the different sectors as given in the following table.
Myths about Blockchain
Important Real-Life Use Cases of Blockchain
1. Dubai: The Smart City
In the year 2016, smart Dubai office introduced Blockchain strategy. Using this technology entrepreneurs and developers will be able to connect with investor and leading companies. The objective is to implement blockchain base system which favour’s the development of various kind of industries to make Dubai ‘the happiest city in the world.’
2. Incant Customer retention
Incant is CRaaS (Consumer retention as a service) based on the Blockchain technology. It is a loyalty program which is based on generating token for business affiliated with its related network. In this system, blockchain is exchanged instantaneously, and it can be stored in digital portfolios of user’s phone or accessing through the browser.
3. Blockchain for Humanitarian Aid
In January 2017 the united nations world food program started a project called humanitarian aid. The project was developed in rural areas of the Sindh region of Pakistan. By using the Blockchain technology, beneficiaries received money, food and all type of transactions are registered on a blockchain to ensure security and transparency of this process. Also read: How to Calculate Your Body Temperature with an iPhone Using Smart Thermometer
What the Future Holds for Blockchain
Blockchain is an emerging technology, so predictions are still mixed about its potential.
In a TechRepublic Research study, 70% of professionals who responded said they hadn’t used blockchain. But 64% of said that they expect blockchain to affect their industry in some way, and most predict a positive result.
A recent Trend Insight Report from analyst firm Gartner made the following forecast:
- Through 2022, only 10% of enterprises will achieve any radical transformation by using blockchain.
- By 2022, at least one innovative business built on blockchain technology will be worth $10 billion.
- By 2026, the business value added by blockchain will grow to just over $360 billion, then by 2030 grow to more than $3.1 trillion Cybersecurity is one of the most promising areas of projected growth for blockchain technology. An ongoing challenge for businesses of all sizes is data tampering. Blockchain technology can be used to prevent tampering, keeping data secure and allowing participants to verify a file’s authenticity.
“We believe that blockchain technology will be transformative in the tech and IT sector in the coming years, similar to what the internet did for the world back in the 90s and early 2000s,” said John Zanni, President of the Acronis Foundation, in Forbes. “Today, part of our storage and backup software lets users notarize any digital data and put that fingerprint on the blockchain to ensure it can’t be tampered with.”
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