Blockchain Technology is an intuitive technology introduced by Satoshi Nakamoto, the creator of Bitcoin. It was introduced to the world in 2009, as the technology underlying Bitcoin. In the past decade, it has evolved into something greater and resourceful. Blockchain Technology has created the backbone of new-age internet. Blockchain enables digital information to be distributed in a decentralized manner with complete transparency.
In this guide, we will explore what is Blockchain Technology and what makes it unique compared to existing technologies.
Blockchain Technology has reduced transaction costs
Through the blockchain network, you can pass information from point A to point B in a fully automated and secure manner. Let’s consider the case of a smart contract on a blockchain, it is initiated by the party initiating the transaction of block-creation. Once the block is created, it is verified by several computers in the mining network across the world. The verified block is added to the chain and stored as a unique record. The record cannot be altered or modified as any changes would falsify the entire blockchain past that block.
Blockchain is a game-changing innovation
Let’s consider the use case of outward remittance. PayPal or the money transfer service charges a transaction fees for processing a transaction and it can vary from 4-8%. The entire process of outward remittance can be moved to the blockchain and the two parties can exchange value on the blockchain using Bitcoin or any other Altcoin like Ripple. Each monetary transaction on the blockchain is a unique, verifiable and unfalsifiable.
The key here is that it comes at minimal cost, much lower than the fees charged by platforms like PayPal. The blockchain can be used to transfer and store money/ value
Unique use cases
Artists may sell recorded music or videos online profitably. Blockchain can be used to cut out middlemen like Playstore, Spotify or Apple and make every block in the blockchain a cloud archive for purchased songs. The fees charged would be minimal and subscription will then become obsolete.
Ebooks and other media can be fitted in blockchain code and writers can get the entire purchase value of the book. This would pay authors and artists much more than the tiny royalty fees.
We have already discussed the case of outward remittance and how it will revolutionize the changes in the world economy.
How does Blockchain Tech work?
A blockchain in its most basic form is a decentralized distributed ledger that can be duplicated across a network, and it can be updated regularly. The key of Blockchain Tech is that the entire ledger is not stored in a single physical location, it is regularly updated on the entire network and copies are maintained on every node. There is no single or centralized version that exists and it cannot be hacked into or modified.
How is the Blockchain network maintained? What are the Nodes?
Blockchain is maintained by a peer-to-peer network of computers connected to the network. Each of them has an updated copy of the blockchain and they are all interconnected to one another. Each node takes in input, processes it and presents independent output. The biggest advantage is that there is no central server and the ledger is distributed among a network of nodes.
Blockchain as a technology is still in its nascent stage phase and because the technology has its applications across a multitude of industries makes it the biggest disruptive force in a decade. However, challenges such as the requirement of high computing power, transactions speed and data limits are yet to be resolved. Nevertheless, the underlying distributed ledger values of blockchain technology has immense potential of revolutionising the way data is managed across various verticals.
