What is Blockchain Technology and How Does It Work? : If you invest in crypto currency or you must have heard the name of bitcoin. So you must have heard the name of Blockchain many times. In today’s time, the use of blockchain has started increasing rapidly. The US, Australia and other countries in Europe are talking about using blockchain technology to store government documents or other old data.
Blockchain is going to be used on a much larger scale in the future. You must also hear the discussion about blockchain in the day-to-day talks. But if you are not aware about Blockchain, then in today’s article we will provide you all the information about Blockchain.
What is Blockchain Technology?
Blockchain is the name of a decentralized technology and cryptocurrency is an application based on it. Blockchain technology is a part of distributed ledger technology, where data is stored in blocks in the blockchain. It consists of a class of blocks, which contain information and this information is cryptographically encoded. In simple words, blockchain is also called electronic database.
Talking about cryptography, it is a way of storing and transmitting data. If the blockchain is being used for money transfer, then the blocks contain the name of the sender, the name of the receiver and the amount information. In addition, the blocks also contain a hash, where the hash goes to the unique identity cards. You can also compare this hash with fingerprint, as fingerprint is unique, in the same way every hash is unique.
Ledger is based on P2P network, if any one block is changed then all the nodes are detected by Ledger. This technology is decentralized, the whole chain is not connected to one system, but all the systems of the whole chain are connected to each other.
There are many types of blockchain, such as public blockchain, all the information is open to everyone, while private blockchain is limited to a few people. The use of Blockchain technology is increasing rapidly, it is used in various fields such as manufacturing, banking, security, etc.
Cryptocurrency, Crypto Metaverse and Non-Fungible Tokens (NFT) are all based on blockchain where NFTs are stored securely in the blockchain itself like all records of cryptocurrency. Whereas the metaverse i.e. the virtual world based on blockchain technology and cryptocurrency is called crypto metaverse.
History of Blockchain
Blockchain technology was invented by Satoshi Nakamoto in the year 2008. Satoshi Nakamoto was the first person who also invented bitcoin. Satoshi Nakamoto also invented bitcoin, he created blockchain technology to record bitcoin transactions.
The purpose behind Nakamoto’s invention of the blockchain was that he wanted to create a decentralized digital ledger that is not controlled by any third party such as the government or bank, and the public can control their own money.
How does Blockchain Work?
Blockchain technology is a system based and working on blocks. Blocks contain user information and transaction history, let’s say there are 3 blocks, these three blocks are connected to each other, all three have a hash. If any block is changed, then the other block gets to know the changes, billions of billions of hashes are calculated by the computer in a few seconds.
Blockchain is also called Proof of Work. Blockchain prepares a list of all the work done by the computer and stores it with itself. If a user makes a transaction, by whom the transaction has been done and where the transaction has been done. Apart from this, the blockchain stores the transaction amount inside the block, the database of the block can be viewed and read when required.
Advantages of Blockchain Technology
- Blockchain can be used digitally in this way. After coding any document, it will be saved in a system. After that you can view this document anytime. Or you can easily send it to any other person as well.
- International experts believe that business practices can be changed significantly through blockchain. Democracy can be secured with blockchain.
- Transactions can be done easily between two parties without any intermediation in the internet.
- In blockchain, data is stored in thousands of computers without keeping the data secure in one place.
- The database in the blockchain is encrypted in which many years of history can be kept.
- Through blockchain, individuals can communicate directly without a bank.
- The transaction takes very less time.
- When two countries transfer money, it will take the least amount of time.
- The paper document will expire.
- Whenever new data is collected in the blockchain, it is very important to get the permission of the computer for this. No one can be added to the Tata Blockchain without permission.
Disadvantages of Blockchain Technology
Fear of document deletion: The biggest disadvantage of blockchain is that anyone can delete the document from it. This is considered to be the biggest disadvantage of blockchain technology.
Expensive Technology: Blockchain is considered to be an expensive technology. Because to use it more and more educated people will be required. Which is not possible for every country.
The end of the banking system: The worst effect of blockchain is going to be on the banking system. The use of blockchain could end the banking system not only in India but in many countries.
How secure is blockchain?
In fact, we all know that nothing is secure in the Internet, but if we talk about blockchain technology, then it can be considered to be quite secure as compared to other technologies.
Let us tell you that if a person wants to do any transaction in the blockchain, then first of all they need to agree to all the nodes of the whole network. This is because only then that transaction will be considered valid, or if we look at it in a way, it is a technology where no single entity can say whether the transaction has happened or not.
If you are thinking of hacking it, then you should know that to hack it, one does not need to hack only one system like a bank. Because in this you need to hack all the systems located in the total network. Therefore, if someone is planning to hack in this technology, then he must have come to know by now that it is not even that easy.
Is Blockchain Technology Safe in India?
India is a democratic country. And here technology like blockchain is absolutely safe. Experts believe that blockchain technology is the most secure for democratic countries. Blockchain technology can reduce corruption in a country like India. And the government Tata can also be prevented from being stolen.
Difference Between Public And Private Blockchain
In the coming time, revolutionary changes are going to happen in Data Security by Blockchain Technology, due to which there will be transparency in the works and time and money can also be saved. There are mainly two types of blockchain technology, public and private, so let’s understand the difference between the two.
Public Blockchain: Public Blockchain is an open network, in which anyone can join, and as soon as it joins, like other nodes, all the activity happening in the network can be seen or seen, and it can also become a part of any transaction that happens. Is. In public blockchain, no one has control over the network and once the data is validated it is very difficult to change it. Examples of public blockchains are Bitcoin (BTC) and Ethereum (ETH), and this is called a secure blockchain.
Private Blockchain: Private Blockchain is a centralized network, which is created or run by a group, and the nodes connected in it are given different permissions and restrictions. In order to join a new node, permission has to be taken from the already connected node. Examples of private blockchains are Ripple and Hyper Ledger, this blockchain is considered less secure.
Conclusion
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