Understanding Blockchain Technology and Its Benefits
How You Could Benefit From This Peer-To-Peer Network?
It was 2008 when someone or a group (the mystery has not been solved till now) by the pseudonym Satoshi Nakamoto introduced a proposal that would end up becoming a huge phenomenon named Bitcoin.
You must be regretting jumping on the bandwagon back then. Don’t worry because we are with you.
The fact that one Bitcoin is around $3,800 would have made anyone envious, but that’s not why you are here at present. It is all about that hidden technology that lies under Bitcoin’s blockchain.
Try To Understand Blockchain
It is used to record the transactions of Bitcoin, and it is the core of other virtual currencies. Its use is not limited to this; it is used for other purposes as well that could prove worthy for municipalities.
Mainly, it is a decentralized, digital public ledger that keeps track of transactions between participants. The transactions could be anything from tracking records, smart contracts that facilitate business affairs, and even purchases that are made by a person.
The transactions are permanently kept in a “block” that is linked to and from respective blocks. Are you still a little lost? All of these technical explanations can be confusing for those who don’t belong to this field.
But thankfully, Harvard Business Review has identified 5 basic principles behind this open-source.
1. Distributed database
Every user within the realm of blockchain has access to the complete database. Besides this, it also includes its complete history, allowing participants to verify transaction records.
2. Peer-to-peer communication
Each user, who is also known as the node, communicates directly with another user. All the information and transactions between the two sides are directly sent to other nodes.
3. Anonymous transparency
It is surprising that transactions and communications are open with all other nodes within that blockchain; still, there is a sense of anonymity as users are provided with a “30 plus character alphanumeric address.”
This address identifies them, and it is totally upon the user whether he wants to remain anonymous or not.
4. Permanent records
When a transaction gets completed between parties, it is entered into the database, and all other users’ accounts are updated with that transaction.
Because of the linkage of a block to every prior transaction, this record is irreversible.
5. Computational logic
Under this, users are able to set up algorithms and rules that will trigger transactions between participants.
Now, when you have got an idea of how blockchain works, you may be asking what makes a new organizational method exciting? There are many ways through which an organization or a business can benefit from blockchain technology.
An example of this is, in July, Delaware signed a $738 million contract with IBM for designing a business filling system, which is built on blockchain tech to track stocks and collateral assets.
Also read: Internet of things in Hospitality
Benefits Of Blockchain
1. A sense of security
This particular network bears a difference from others that we use because the security methods of blockchain involve encryption technology, which makes it harder for hackers to infiltrate.
This method is more secure as compared to the old “username/password” method. The larger your blockchain is, the better security it will posses
2. Decentralization
Because this technology is decentralized, the data being stored within the blocks is stored across its entire network.
The exclusion of central authority is another addition of security due to the simple fact that there is no central point that can be exposed to hackers, and it puts individual control in focus.
3. Cut out the middleman
Another benefit is that there is no need for banks, lawyers, and accountants. Rather, it gives the benefit of utilizing consensus protocols when validating transactions.
Through this, not only your money gets saved, but you also minimize the human error that can come along with third-party involvement.
We would like to make you aware of the consensus pool. It is an agreement between various devices across a network.
Basically, it is the rules that all the participants must follow while communicating and completing transactions with each other.
The Botton Line
So, this was the quick lesion on the blockchain. There are many bits of information that go into this technology, and there is much more to be understood by you.
That’s why we have you started with the basic information so that you can keep an eye on this technology to understand more about it.
Because, adoption of this technology can take us closer to a more cost-efficient, secure, and fast future that is the digital age.
Get started today!
About The Author
