This technology is considered an ingenious invention. The brainchild of a person or group of people which is referred to as Satoshi Nakamoto. But the original technology has evolved. Through the blockchain technology, it is possible to distribute information rather copying it. One of the reason why we are on the verge of a new type of internet, using blockchain technology. This is initially devised and used by Bitcoin, the digital currency.
Today the tech community has found many other potential uses for a blockchain. As such one can see a blockchain revolution unravelling these days that led to the bitcoin revolution as well. Bitcoin today is being referred to as digital gold. There is a good reason behind this, $112 billion US is the total value of the currency at the time of writing. Other digital value can also be made based on blockchains.
For example, few people use their car but they do not know how it works. Similarly one can use blockchain without knowing how it works. But if we understand this technology, then it is easy to understand why blockchain is a driver for a (r)evolution. In simple words, the blockchain can be understood as a digital ledger which is incorruptible and used for making transactions which can also be programmed for recording virtually everything which has value and not just financial transactions.
To understand blockchain, imagine a document which is duplicated and distributed across several computers in a network. The network here is designed in a way so that it updates that document regularly. If you can imagine this, the basics of a blockchain are achieved. The information present in the blockchain is always shared and reconciled continuously with the database. This method of using the network comes with a lot of advantages. The database of the blockchain is never stored in one single location. So, the records here are public and they are very easily verifiable. There is no concept of centralized information in the blockchain. It is therefore not easy for a attacker/hacker to corrupt it or even trying to. Since it is hosted using millions of computers it is possible to access the data by anyone who is using the internet.
A blockchain is decentralized, which means that the information is not stored on a single central server, but is replicated exactly on all the computers participating in this blockchain. This technology is based on peer-to-peer (P2P) exchanges, and all databases must be identical in order to be valid.
The transparency of the blockchain information being total, it is possible to retrace the history of all the modifications made to the database since its creation. It is easily understood that if one or more computers, also called nodes of the network, display different data, the majority of servers will still be the reference standard for the validation of transactions, hence the absence of a central control body or trusted third party.
As explained above, every change made to the database must be approved and verified by the majority of network nodes. This system is therefore very secure, because to corrupt it, it would be necessary to simultaneously attack more than 51% of the participating replicate databases.
There are many advantages of blockchain technology. We listed some:
In the blockchain technology, it is possible for users to make transactions and verify them later without the involvement of a thirty-party. This avoids backdoor transactions and hence the reduction of associated risks. There will not be any interference of unauthorized third-parties. Even though the environment is completely distributed, it is not easy to mess with the data on the network. There is less chance for data tampering, since blockchain can create a robust system, there is less chance for data tampering.
This ledger technology allows reviewing of every information as well as each and every transaction made by users. Once the user makes a transaction and gets validated, the data in the blockchain will be accurate, consistent, and complete. Each and every member has the right to make transactions in public and is a great example of why this is a great transparent system. Since those transactions can be seen in one public ledger there is no complication of maintaining multiple private ledgers.
Blockchain offers reduced transaction time as transaction are being processed 24/7. Just a few minutes are required for a transaction to complete. This is very fast compared to the interbank transactions which take days to complete. Hence businesses are saving a lot of money through the automation process. There is an opportunity given by blockchain to radically transform the way things are done by offering a standard architecture which addresses organizational and business problems.