Nowadays, we frequently come across the term blockchain technology. A blockchain is an increasing list of records or blocks that are connected with the help of cryptography.
Every block has a cryptographic hash of the earlier block as its component, transaction details (typically symbolized as a Merkle Tree), and a timestamp.
What is Blockchain Technology: Important Features?
According to its blueprint, a blockchain is immune to alteration of its data or credentials. It is due to the reason that as soon as its documentation, no one can modify the data in any particular block in a retrospective manner without modification of all the succeeding blocks.
A blockchain is normally supervised by a peer-to-peer (P2P) network for application in the form of a distributed or decentralized ledger. This network cooperatively abides by a protocol for the inter-node exchange of information and authenticating fresh blocks. Even though blockchain registers or records are unchangeable or unmodifiable, blockchains are regarded as secure by design (SBD). They represent a decentralized calculation scheme with elevated Byzantine fault tolerance.
The definition of blockchain is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way”.
Goal of Cryptocurrencies
In 2008, a group of individuals designed blockchain and they used the name of Satoshi Nakamoto. The goal was to create a platform that would assist as the public transaction ledger of the Bitcoin cryptocurrency. The development of the blockchain for Bitcoin turned it into the foremost digital currency that worked out the double-spending issue without necessitating a central server or reliable regulatory agency. The blueprint of bitcoin has encouraged other uses and applications. Cryptocurrencies are now extensively using blockchains that are decipherable by the common people. People look at blockchain as a form of payment rail (payment platform or payment network that transfers funds from a payer or drawee to a payee or drawer). For business applications, private blockchains have the highest recommendation. Computerworld, a famous computer magazine, termed the merchandising of this type of blockchains in the absence of a suitable security pattern as “snake oil”.
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What are the Blocks?
Blocks operate as storehouses of authentic transactions or deals that have been encrypted and hashed into a Merkle tree. Every block contains the cryptographic hash of the previous block existing in the blockchain and it connects the two. As a result, the connected blocks comprise a chain. It is a repetitive procedure and this corroborates the inclusion of the preceding block, completely to the pilot genesis block.
Applications of Blockchain Technology
Nowadays, blockchain technology is present in various domains. At present, blockchains are mainly used in the form of a decentralized ledger for cryptocurrencies. Blockchains mostly transact in bitcoins. Moreover, there are a handful of functional merchandises developing from proof of principle or proof of concept by the latter part of 2016. Businesses have been hitherto unwilling to put blockchain at the centre of the business organization.
Nowadays, blockchain technology has its applications in the majority of cryptocurrencies for documenting transactions. For instance, the Ethereum network and bitcoin network both function based on blockchain. Facebook asserted about the launch of a fresh blockchain group on May 8, 2018. David Marcus, who previously led Messenger, is the chief of this group. Libra, the much-awaited cryptocurrency platform of Facebook, was officially declared on June 18, 2019.
A significant portion of the financial industry is using distributed ledgers for application in banking. As a result, of IBM’s research in 2016, this is happening much before their expectations.
More and more banks are getting keen to use blockchain technology since it can accelerate the back-office clearance setup.
Banks like UBS Group AG are establishing new research laboratories for blockchain technology. The objective is to delve into the innovative and potential ways in which blockchain application can take place in the financial sector to raise productivity and lower expenses.
Other areas where blockchain technology has its applications include the following:
- Food supply – Popular names include IBM, Walmart, HerdX, and Fogo de Chao.
- Mining – Everledger, DTC are some prominent names using blockchain applications.
- Blockchain software development – Hyperledger Grid, the blockchain endeavour of the Linux Foundation.
- Shipping – Walmart Canada.
- Healthcare – Ernst & Young adopts healthcare blockchain systems
- Domain names – Namecoin, Unstoppable Domains, and Ethereum Name Services
Other blockchain applications include sales data compilation, monitoring digital applications, and payments to content originators like instrumentalists or wireless customers. Blockchain also has applications in parametric insurance, peer-to-peer insurance, as well as microinsurance. The insurance industry is implementing new distribution systems as mentioned above after the approval of blockchain. The Internet of things and the sharing economy will gain from blockchains since they necessitate various co-operating peers. One more application is online voting.
Other patterns of blockchain include:
- Hyperledger: It is a cross-sector joint endeavour from the Linux Foundation for assisting blockchain-oriented decentralized ledgers. Under this endeavour, ventures include IBM-led Hyperledger Fabric and Hyperledger Burrow by Monax.
- Tezos: For decentralized voting.
- Quorum: It is a private permission-able blockchain by JPMorgan Chase with the availability of private storage. Its implementation is for contract usages.
- Proof of Existence: It is an online service to authenticate the presence of computer files from a particular period.