The blockchain market is disrupting everything. Blockchain is the Holy Grail for Bitcoin & other Cryptocurrencies. Are you ready for Blockchain? What do you think about Blockchain Technology?
Let’s enter Blockchain. Satoshi Nakamoto 2008, an anonymous person came up with the idea of the transactions during business with assets peer-to-peer. And trust is not achieved by a middleman. It is achieved by cryptography, by collaboration, and by some clever code that we now have made a medium for value.
In technical terms “it’s a distributed database managed independently and that inherently makes it a utility that has value.” The business world after 10 years is going to run on smart contracts along with strong encryption and peer to peer base consent mechanisms. The core technology under blockchain is going to provide everything just like the internet has, just like object-oriented software has.
Let’s understand how it works.
Blockchain acts as a ledger we have in shops. It keeps a record of all the items sold and assets we get.
· Blockchain as its name suggests is the combination of blocks that hold the relevant information of blocks. Like the information of bitcoin stored in the block.
· The 2nd thing which is stored in the blockchain is Hash. It acts as a biometric and generates a unique code. Like we have fingerprints as biometrics for many kinds of stuff, the same blocks have Hash.
· The 3rd information stored is the Previous Hash. As the 3rd block will contain a hash of the 2nd block and 2nd block of the 1st respectively. Therefore, a chain structure will be formed.
· The first block is called the genesis block.
In this way, it is easy to track the history of everything by maintaining security. A lot of security layers are added to keep the blockchain secure. Suppose we want to change any data inside a block, the Hash of that particular block will automatically change. Changed Hash means the next block will also show the error of irrelevant Previous Hash and the same goes till the end of the chain.
Some genius minds will say: we will change the Hash of all the blocks!
Hahaha! Nice but you can’t!
It’s very time-consuming. Changing the hash of one block takes 10 min. If the chain has a 1Cr block it will take around 200 Years to change the Hash of the entire Blockchain.
This time-consuming concept is called Proof of Work. It means that you have to prove that you took 10 min to implement or change hash in a block or bitcoin. The most important theory here is the people in one network should have a copy of the entire blockchain. No one can make any changes on their own. You have to share your block with everyone that you want to change & a vote will be done whether the change is acceptable or not.
This is called the Consensus rule. It states that if we want to add a new block then you have to spend 10 min in creating the block and sharing it through the network, and when the majority will vote for change acceptability then only the block will be added.
Blockchain is used in various domains. The major one is Cryptocurrency.
The value of bitcoin has increased rapidly. It has implemented the technique of eliminating the middleman or we can say the Banks. Earlier when we want to send money from India to the US, we have to send it in Rupee to the bank & Bank will transfer that Rupee to the US dollar$ and then transfer it to the US. Along with this, they charge a fee for transactions done.
Now we can just send Bitcoin where the transfer fee is also minimal. We used to transfer Gold from asset to asset. The same goes now for bitcoin. Bitcoin is digital gold or I can say Gold 2.0. It’s the money built for the internet. Bitcoin is better than currency because you don’t have to be physically in the same place. Bitcoin is right now at the bottom of its first Innings as many people, institutions don’t know about it.
Some people get confused between Bitcoin and blockchain. They think Blockchain is Bitcoin.
No!
Bitcoin is just a small function of blockchain. The bigger picture or uses cases of blockchain are:
· Used in real-estates
· Hospital management system
· Election voting
Blockchain has a concept called smart contracts which can be used in businesses, and start-ups that act as real contracts but in digital form. It acts as code or algorithm. So, one of the popular codes or cryptocurrencies Ethereum can be implemented using the Solidity programming language. It uses the Proof of State concept which makes it faster, more secure, and highly used.
We need to study Blockchain technology. Since the future of money is a digital currency. No paper or physical money will be used as far as I think. The future is full of decentralised systems or programmable security.
