What is a Blockchain?

Blockchain seems to be the buzzword nowadays. This word came into the spotlight last year when the value of bitcoins unexpectedly rose to the sky, rocket high. Almost everyone must have heard about this revolutionary term but do everyone understand it completely? In a layman’s language consider it just like a diary or a ledger that cannot be fabricated. Now let us discuss it in detail as to how it actually works.

As mentioned earlier, Blockchain came into the picture with the arrival of Bitcoins. The Blockchain is the driving technology and a critical element behind the bitcoins and other cryptocurrencies, without it the digital currencies would have ceased to exist.

Ralph Merkle is the man who constructed the primal form of blockchain which was a hash tree in 1979 used to verify and handle data between different computers. Later in 2008, Satoshi Nakamato re-designed the whole concept that could be managed independently without a central governing authority and hence became the main element of bitcoins.

What do we know about Blockchain?

· It is an online ledger of transactions which is permanent and decentralised and it cannot be forged.

· Central autonomous authority is not needed to participate in the blockchain.

· As the word itself suggests that it is made up of blocks creating a chain that controls the valid transaction data.

· Using this technology, one can store an asset in the form of money, securities and votes etc from anywhere.

Working of Blockchain

Now, we shall discuss the working of blockchain in the simplest form possible using the following points.

· Once the transaction is done using this technology, it generates a hash which is a combined string of numbers and letters.

· The hash that gets generated depends not only on the current hash but the previously generated hash as well.

· A slight change in the transaction can be responsible for the creation of a new hash.

· After that inspection is done in order to check that the transaction was not changed. This inspection is done by various computers called “Nodes”.

· If the majority of nodes approve the transaction then it is written into a “Block”.

· Each block, when combined with the previous blocks, form a chain known as a BLOCKCHAIN.

· The blockchain gets updated in every 10 minutes and has spread over many computers.

Application of Blockchain Technology in Various Sectors

This technology is clearly making a change and bringing a transformation in various sectors. Few sectors have been discussed below that will largely get benefit through Blockchain.

1. The Banking Sector: Financial institutions majorly face the never-ending day to day challenges of money security, identity theft, cost efficiency and much more. Blockchain will surely disrupt all these issues and will give a new way of working to the banking industry. As this technology is all about secured and encrypted ledger it will offer security, accuracy and faster transaction at less cost. Blockchain would also maintain a secured record of millions of transactions that take place in the financial sector. Some of the financial institutions that are using this technology are Citi Bank, Goldman Sachs, JP Morgan, Standard Charter Band etc.

2. The Healthcare Sector: Storing medical data and records of patients is something any healthcare institution has to do. The main challenges that this sector face are keeping records of the patients safe and private from hackers, loss of data, error-free recording of medical data etc. Blockchain technology can give an easy platform where the data can be easily stored and can be accessed by the healthcare professionals and the patients without any hassle.

3. Voting: We all are well aware of the EVM tampering that is done while people cast their votes. The resolution of this problem is provided by blockchain. Blockchain can keep a track of the votes while keeping the voter’s identity a secret. Also, blockchain can provide an online solution of casting votes and eliminate the problem of the physical presence of voters at voting booths.

4. Legal Industry: In legal industry too blockchain technology will work as a boon. Various legal documents can be stored and verified easily and any change made can be authenticated. This technology can cut short the lengthy court hearings and will resolve concerns related to various documentation.

5. Internet of Things: Internet of Things is another advancement in the world of technology. Soon we will live in the world where our phones will be able to talk to the electronic gadgets used in our homes. Such a technology is again at a risk of security issues. Here is where Blockchain technology will come to our rescue. Blockchain would easily handle and secure data in an encrypted format.

Every technology has some Limitations

Every coin has two sides. Regardless of many pros, even this technology has some cons which are:

· With all the jargons and technicalities a person from a non-technical background can have some initial difficulty in understanding this technology.

· Once the transaction is done, it is done. It is irreversible.

· Due to the anonymous nature of this system, many hackers and scammers can use it for various cybercrime.

· The Blockchain is vulnerable to a concept known as “51% attack”. If 51% of nodes validate an invalid transaction then it will be treated as a valid transaction by default due to the working of this technology.

Conclusion

Blockchain technology is definitely a revolution that can change how the world works, at the same time, its complexity can cause some initial difficulties. But no matter what this technology is the future of every transaction.

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