Blockchain technology pertains to information storage in digital format. It is popular for its crucial role in cryptocurrency systems like Bitcoin. This is important for securing and decentralising records of transactions. It is a distributed database that is shared through nodes of a computer network. You can’t changed or modify data once it is stored in Blockchain. This makes it a legitimate disruptor for industries like cybersecurity, healthcare, and payments.
Blockchain are also called distributed ledger technology (DLT). In simple terms, blockchain technology almost operates like how Google Docs works. You simply distribute it instead of copying or transferring it. It then creates a decentralised distribution chain. This allows everyone to access the base document simultaneously. No one will be locked out while waiting for changes from another party. The changes in the document are being recorded real time. It is important to note that unlike the Google Docs, the original content and data on blockchain can’t be modified once it is written. This is another level of its security.
Why is Blockchain Technology important?
Because of its promising and revolutionary technology, it plays an important role in the coin market and non-fungible tokens (NFT’s). It helps in reducing security risks, destroying frauds and provides transparency. Due to its continuous hype in cryptocurrency, the blockchain technology evolved as a solution for all kinds of global industries. Nowadays, you will see it providing transparency for food supply chain, healthcare data security, gaming innovations. It is changing how we handle data and ownership on a large scale.
Most businesses, especially the coin market, runs on information. The faster and the more accurate the information is received, the better for the industry. Blockchain is ideal. It is providing immediate, shared, and almost transparent information stored in a ledger. A private key secures the ledger. It helps in tracking orders, payments, accounts production, and many more. Since all members share the same single view, it gives them all the details of a transaction end to end. It receives the data through the computer connected to the same network for their transactions.
What are the benefits of a blockchain technology?
As the blockchain works the same as a digital ledger, operated digitally, many companies and business have sticked to using blockchain.
The following are some of the benefits that a blockchain can do:
- Having transactions kept inside a blockchain provides greater security between the users
- Using a blockchain also provides more trust. Users can only share the data stored in the blockchain to the people that have been granted permission and access to it.
- You don’t have to worry about privacy or data being leaked. All transactions inside the blockchain are recorded permanently. Users, as well as administrators won’t be able to delete any part of the blockchain.
- A digital ledger like the blockchain provides a smart contract which is a set of rules for the users of the blockchain.
- A blockchain provides the most secured help and efficiency in aspects such as the coin market, cybersecurity, accounting and record keeping, and the supply chain.
What are the types of blockchain networks?
You can access a ledger using a blockchain network. It provides smart contract services to the applications used inside the blockchain. There are 4 types of Blockchain network which are the following:
Public Blockchain Network
A public blockchain network is where anyone can are able to join and use the network. Drawbacks of this network include substantial computational power needed. There is usually little to no privacy in transactions inside the blockchain. And this usually has weaker security.
Private Blockchain Network
In this type of network, there is usually one organisation that is tasked to control the whole network. It controls who is allowed to enter and participate inside the blockchain. It also provides a protocol that is fair to everyone, and maintain the ledger. This is also the most preferred blockchain network as this guarantees trust and confidence to every user.
Permissioned Blockchain Network
A permissioned blockchain network is where there is an invitation needed to get in the blockchain. Private companies and organizations set up this type of network.
Consortium Blockchain Network
This type of blockchain network is where multiple organizations are gathered together to work on the blockchain. These organizations can also determine who may be able to pass transactions or access the data inside the blockchain.
Connection: Cryptocurrency and Blockchain
As a Blockchain works as a digital ledger, this helps Bitcoin and other types of cryptocurrency to work without the need of an authority that will govern the whole system. This process helps limit the risks that exist in the digital world. It helps customers save more cryptocurrency inside their crypto wallet by taking away processing and transaction fees. Through the use of cryptocurrency, which works on a Blockchain, this is also helpful for the people who have no state identification. This also helps people with no access to savings accounts.
Blockchain became the first cryptocurrency. It is also considered as a top cryptocurrency of today. From then on, Blockchain technology became known as the foundation for Bitcoin. With Blockchain, transactions made through crypto would make it close to impossible to be accessed. Blockchain provides the most secured system to ever exist. A code is locked in a private key. It is given to the user for easy access on their assets inside the Blockchain. Blockchain also gives out information of all the crypto transactions to all computers connected to the same network for permissioned users to be able to view the data, which usually includes crypto mining and crypto exchange.
Pros and Cons of a Blockchain
There are a lot of pros to using Blockchain. This includes fast transactions, almost any time of the day. It also provides high security due to the fact that this is a distributed ledger. There is no implementing third party or intermediaries. This means cryptocurrency is provided directly to its users.
On the other hand, there are also cons to using a Blockchain. As technology improves, the more prominent digital attacks could also be possible. Data stored inside the digital ledger could also be targeted to attacks. Consuming electricity would also be a problem. Too consumption of electricity causes carbon dioxide production. It also causes greenhouse gasses to be released into the Earth’s atmosphere. This could cause serious damage to all living things. Lastly, Blockchain provides a private key that can be used to create transactions inside the blockchain and is given to all the users. You could possibly lose almost all of its assets is the private key is stolen. And since there is no third party or intermediary that can come in between to help users gain it back, you could lose everything.