A blockchain is a decentralized and distributed digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the collusion of the network. This allows the participants to verify and audit transactions inexpensively. Blockchains have been described as a value-exchange protocol. This blockchain-based exchange of value can be completed more quickly, more safely and more cheaply than with traditional systems.
A blockchain database consists of two kinds of records: transactions and blocks. Blocks hold batches of valid transactions that are hashed and encoded into a Merkle tree. Each block contains the hash of the prior block in the blockchain, linking the two. The linked blocks form a chain. This iterative process confirms the integrity of the previous block, all the way back to the original genesis block. Some blockchains create a new block as frequently as every five seconds.
Blockchain technology is like the internet in that it has a built-in robustness. By storing blocks of information that are identical across its network, the blockchain cannot:
- Be controlled by any single entity.
- Has no single point of failure.
With a blockchain, many people can write entries into a record of information, and a community of users can control how the record of information is amended and updated.
Yet, blockchain technology, for all its merits, is not a new technology.
Rather, it is a combination of proven technologies applied in a new way. It was the particular composition of three technologies (the Internet, private key cryptography and a protocol governing incentivization) that made bitcoin creator Satoshi Nakamoto’s idea so useful.
1- Private key Cryptography
2- P2P Network
3- Program ( the blockchain’s protocol)
The result is a system for digital interactions that does not need a trusted third party. The work of securing digital relationships is understood – supplied by the elegant, simple, yet robust network architecture of blockchain technology itself.
Blockchain technology has a large potential to transform business operating models in the long term. Blockchain distributed ledger technology is likewise a foundational technology-with the potential to create new foundations for global economic and social systems-than a disruptive technology, which typically “attack a traditional business model with a lower-cost solution and overtake incumbent firms quickly”.
By enabling digital information to be distributed but not imitated, blockchain technology created the backbone of a new type of internet. Originally devised for the digital currency, Bit coin, the tech community is now finding other potential uses for the technology.
Author, Rajiv Srivastava is living in India. Rajiv Srivastava is part of our authors community since