Blockchain-The revolution in technology

 Introduction

We all might have encountered with the term “Blockchain” at any point of time in our life. But the question hitting on our mind is that what actually it is? How it is used in our daily lives and its impact on us? Blockchain is the technology to store data and information in a decentralized manner. Or A “blockchain” is distributed archive of information that is replicated across various nodes on a “peer-to-peer” network to ensure integrity and verifiability of data stored in the archive. Blockchain technology has traditionally been used as supporting structures of cryptocurrencies such as Ethereum, Dogecoin, and Bitcoin. However, their use in the non-cryptocurrency application too has a seen steep rise with some solutions allowing individuals and companies to draft legally binding “smart contracts”, which enables detailed monitoring of supply chain networks.

Decentralization Process

Decentralization is the transfer of control and decision-making power from a centralized entity (individual, institution, or organization) to a distributed network. For example, In the centralized system in India, RBI(Reserve Bank of India) is the central authority that monitors the value of each denomination of the Indian rupee and guarantees the particular amount mentioned in the note or a coin. But on the other hand, currencies like Bitcoin, are decentralized. There are no central authorities or agencies controlling Bitcoin.

How does it work?

Well, let’s take a closer look at a blockchain working. There can be many ways to store information. Writing down something on paper is a way to store information. Writing something on an excel file on the computer is a way to store information, where your information is structured in the form of a table. Similarly, in a Blockchain, the information is structured in the form of blocks. The data that is stored inside a block depends on the type of blockchain. The Bitcoin blockchain for example stores the details about a transaction here, such as the sender, receiver and amount of coins. A block also has a hash that can be compared to a fingerprint for general reference. Hash identifies a block and all of its contents and is always unique, just as a fingerprint. Once a block is created, its hash is calculated. The third element inside each block is the hash of the previous block. Changing something inside the block will cause the hash to change. So in other words- hashes are very useful when you want to detect changes done in blocks. If the fingerprint of a block changes, it no longer remains the same and will generate an error. So hacking blockchain is next to impossible.

Workflow of Blockchain

Uses and some limitations

“Blockchain is the future,” says some experts, as there are many sectors where Blockchain is very useful and is already being used there. For example, In the Healthcare sector, blockchain can be used to store medical data; so that the medical record of the patients is not stored in a database in a centralized way. A doctor cannot access them unless there is a need, giving more privacy to the patients. Similarly, property management, crowdfunding, and the management of Government data can be done efficiently by using Blockchains. But some critics look on the other side, citing some disadvantages. If one wants to alter or do fraud in the Blockchain, one would need the majority of at least 51% computer or system. This is considered a disadvantage of Blockchain. If someone hijacks or hacks 51% of the computers on the network, fraud can be done or allowed to be done on the network. But realistically, to hack 51% of the computers on the network is next to impossible because all of them are decentralized, they’re not connected to each other. It is not that if one is hacked, the others are hacked as well. They will have to be hacked individually at their locations and in a large blockchain, like bitcoin’s, where millions of computers around the world are connected on the network it is almost next to impossible. In the coming time, we’re moving towards a decentralized future which means that many websites and applications on cloud-based platforms soon will move to Blockchain. The drawbacks of blockchain are negligible compared to its benefits, and seem to be a very promising technology!!

3 Comments

Leave a Reply

Your email address will not be published.