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Blockchain: What it is, How it Works and its Uses

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521 Listen to this article Introduction Follow my blog with Bloglovin Blockchain is a trendy topic nowadays. Though everybody knows […]

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Introduction

Follow my blog with Bloglovin Blockchain is a trendy topic nowadays. Though everybody knows the name “Blockchain” but doesn’t understand it properly. Blockchain in simple terms can be said to be a database. But what is a database? A database is a place where one can store important data. Those data can be images, documents, videos, etc. And the database stores this data in digital format. This is just a basic understanding of blockchain in this article, we will understand more about Blockchain

What is a Blockchain?

Earlier we had the basic knowledge of blockchain but now let’s understand blockchain more clearly with an example. It is not new that nobody knows about corruption, where people tend to give and take money under the table for doing some sort of work. Though these transactions can’t be shown to everyone, they are still stored in the database. But can we rely on these databases? Will they ever leak those data? What if the person has the authority to make changes to it? To solve these problems blockchain can be used. It is more secure, and everybody has the authority to access that data.

Blockchain as the name suggests is formed of two words “block” and “chain”. Here block refers to data and chain refers to in which system these data are connected. It was first implemented in 2009 by Satoshi Nakamoto (an anonymous developer) to build Bitcoin using blockchain. After that, the concept of Cryptocurrency came into existence. In simple terms, blockchain can also be understood as just like a ledger of a shop where all the records of, from where the goods are coming, when it is being delivered, who delivered them, and whom they were sold, etc. details are kept, blockchain also does the same.

blockchain is a decentralized system i.e., unlike other systems where access to the database is given only to the database admins, and thus they can change anything within the data anytime and was not secured enough, making blockchain decentralized allowed giving access to not only a single person but many more who were have access to it and due to which making changes to the data became nearly impossible as not everyone may have the consent to it. The data in the blockchain can only be changed if and only if all the members having access to it agrees to do so. Since blockchain is far more secure than any other type of database system, that is why it is also used widely by many small and big companies throughout the world.

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How does blockchain work?

In the earlier example, where the ledger has the record of every single detail those details in the concept of blockchain are known as blocks, blockchain is nothing but a chain of those blocks only. These blocks store much necessary information and, the first one is called Relevant Data which is nothing but important information, for Bitcoin that information may be the transaction details.

The second detail stored in the block is Hash, which is a unique code generated by the block itself to secure the data. The last information stored in the block is the Previous Hash, since these blocks are connected via a chain that’s why each block is required to store the unique key which is the Hash for its previous block so that data can be iterated and fetched easily.

Now the question may come, the first block will store whose Hash? Since the first block is never connected to any other block thus it doesn’t store Hash of any other block and such block is known as Genesis Block. Genesis block works as the starting block of the blockchain. Because of having a unique code i.e., Hash, every block can store unique data which adds more security to these data and thus makes it not vulnerable to any changes that can be done by any imposter.

Hacking is a common cyber threat in this era. Since blockchain stores all the information, even if the hacker remains anonymous still the changes in the address will be stored in the block, and that can be used to trace the hacker as well as the lost data and can retrieve it too.

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How Blockchain is used?

Blockchain is used greatly by many small and big firms throughout the world. Because of its security feature everyone wants to use blockchain. Bitcoin which is entirely based on blockchain has been a boon to the world of cryptocurrency and from the beginning to now it is serving well the world of Bitcoins. But the thing is blockchain is not limited to bitcoins only but is also being used in many other areas too.

Big firms like Siemens, Walmart, Unilever, etc. are also experimenting with blockchain to increase its usability in different other fields. For example, IBM’s experiment includes a blockchain for Food Trust. It stores all the information from where the food is being transferred to its destination and also takes notes of different locations the food has gone through in the form of blocks in a blockchain.

This is done to understand if any germs are present in the food, then from where it has occurred, and finally the destination is traced out. Most of the food industry suffered because of many diseases that can spread from food. This Food Trust blockchain ensures and helps to trace down the cause and remove it from the root so that the food industry remains unaffected. Besides this, using of blockchain has allowed many brands can also see with whom food may have come in contact, and can also track food items from location to location.

This is just another example of the use of blockchain in other industries except for cryptocurrency and other transactions. Blockchain is now widely used in many other fields like health and medicines, voting, protecting copyrights and royalties, wills and transferring contracts, and many more. It has been a boon to various industries.

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Conclusion

It can be concluded that Blockchain is a raising market in today’s world, which is showing a major impact in many of the industries and will flourish more in the upcoming future too. Being much more secure, people are accepting it rapidly in their daily use and at the same time many firms are also introducing it into their systems for keeping an eye on every detail of their work.

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