Blockchain: DNA of Bitcoin
- 15 March 2017 | 1625 Views | By Mint2Save
A blockchain is a shared, immutable, online, digital and a public ledger of all Bitcoin transactions that have ever been executed. It is persistently growing as ‘completed’ blocks (records arranged in databases) are added to it with a recent set of recordings. The blocks are added to the blockchain in chronological and linear order. It fosters a new generation of transactional applications that establish trust, accountability and transparency.
How Does it Work?
A block is the ‘current’ part of a block chain that records a few or all of the new transactions, and once it is completed it goes into the blockchain as the permanent database. Every time a block gets completed, then a new block is produced. There are a innumerable number of such blocks in that blockchain. By storing the blocks of information that are indistinguishable across its network, the blockchain cannot be controlled by any of the single entity and has no solitary point of failure. A network of computing nodes makes up the blockchain.
As a rising technology, blockchain enthusiasts are expectant it could be the next big growth disruptor. By providing a clear, instant and indisputable record of transactions, its potential to remove corruption and provide simplicity and accountability is one area of conspiracy.
Blockchain could also be used for land possession and property rights. Usually, governments keep records of the person who owns a certain piece of property or a land, and rationally, the owner may or may not have a piece of paper to prove it. However, government records can be lost or manipulated. But the blockchain could function as an unbiased or a neutral broker to determine who owns what through which the chain could prove, have been verified by a blockchain database, and stored securely on the ledger.
So, the distributed nature of a blockchain database means that it becomes difficult for hackers to attack it, they would find harder to get access to every copy of the database simultaneously to be successful. Thus, it keeps data secure and private because the hash cannot be converted back into the new data. Blockchain is not just any new technology, but it is a challenge for other existing software technologies because it has potential to replace other existing practices. For instance, in January 2016, the UK’s chief scientific adviser urged the government to adopt this technology, even, companies such as Microsoft are developing their own blockchain services.
Blockchain is the architecture for a new system of decentralized trust less transactions, which is a key to data creations and privacy innovation. It allows the disintermediation and decentralization of all the transactions of any type between all the parties on a global basis. Blockchain is like an another application layer to run on the existing stack of internet protocols by adding new steps to the internet to facilitate economic transactions both immediate digital currency payments (crypto currency) and more complicated financial contracts. Any financial contract, currency or soft or hard asset may be transacted with the system like Block chain. It is not only used for such transaction, but also for the registry and inventory system for tracking, recording, transacting and monitoring all the assets (including the area of finance, economics, physical property etc.).
With the Blockchain technology overlay for payments, not just the basic payments, but micropayments, token earnings and spending, decentralized exchange, smart contract issuance and execution, and digital asset invocation and transfer working as an economic layer the Web never had.
The block chain industry is in an emergent and immature and very much still in development with many risks. Thus, Blockchain consists of the benefits and drawbacks associated with it. Some of the benefits such as users are in control of their transactions and information, the data of block chain are complete, timely, accurate, consistent and widely available, as all the transactions are added in a single ledger, thus reduces the clutter and complications of multiple ledgers, faster transactions, and lower transaction costs etc., are the benefits of Blockchain. The challenges such as it has large energy consumption (as the bitcoin block chain network miner’s are attempting 450 thousand trillion solutions per second) which uses a substantial amount of computer power. Other challenges such as transaction speed, verification process, data limits, culture adoption, cost, security, privacy, uncertain regulatory status etc., will be crucial for blockchain.
‘You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.’