The world is fast-moving. Innovations are being developed every day. As a result, the global market is flooded with technologies that, decades ago, would have been beyond imagination. One of such technologies is blockchain technology.
If you regularly use the internet, there is a high probability that you would have encountered blockchain technology. Nowadays, it is branded as the ”technology of the future”. Influencers are talking about it, and governments are considering integrating it into their systems. However, taking away the popularity of blockchain, many people still do not understand what it means.
What is Blockchain Technology?
In its simplest form, Cryptocurrency is a digital database that stores transactions in a distributed manner. With blockchain, the storage of information is carried out by duplicating the information on every computer system that is within the network. Just as the name implies, the blockchain network consists of data stored in the form of ‘blocks’ and added to a chain of other blocks.
How Does Blockchain Technology Work?
By its design, data stored on the blockchain is distributed and irremovable. To achieve this, a hash is assigned to every transaction stored on the network. The hash is an identifying code, sort of like a unique number. No two or more transactions can have the same hash. The hash ensures that information is not edited or removed and that cryptocurrencies are not spent twice.
The major difference between blockchain and a conventional database is that, unlike a conventional database, blockchain technology is not controlled by a single source. Instead, the transactions are jointly verified by people who own computers on the blockchain network. These people are called miners, and they earn money from the verifications that they conduct.
Look at it this way: You have a fintech company. When you integrate blockchain technology into your operations, each transaction will be stored and distributed to each system on the blockchain. The blockchain will be updated in real-time as more transactions are added. All transactions that are stored on the blockchain are time-stamped. So, they cannot be deleted or edited. This description is exactly how a blockchain works.
Types of Blockchain
There are three major types of blockchain. They are public blockchain, private blockchain, hybrid blockchain, and consortium blockchains. However, the first two are the most popular forms, and this article will explain.
A public blockchain is a distributed ledger that allows virtually everyone to view the information on its network. This form of blockchain is one that cryptocurrencies are built on. With public blockchains, anyone can gain access to data and verify transactions. Essentially, it is permissionless. Examples of public blockchains are Bitcoin and Ethereum.
This form of blockchain differs from public blockchains because it is permissioned. This permissioned-nature means that while the data is also distributed across numerous computer systems, there are restrictions on persons who can gain access to the network. This form of blockchain is often used by private organizations that seek to integrate blockchain technology into their services.
Uses of Blockchain
Over the years, the usage of blockchain has expanded. Some platforms like DLTify provide companies with access to decentralized blockchains. This access is important because the benefits of blockchain have extended to many areas of the economy. Regardless, some of the areas in which blockchain has been instrumental are:
For many people, Bitcoin is the first thought when blockchain is mentioned. This familiarity is not strange, as founders first deployed blockchain technology with the launch of Bitcoin, the first cryptocurrency ever to be created. Since then, thousands of blockchain-backed cryptocurrencies have been created. Cryptocurrency exchanges and digital asset providers have also been built on the blockchain to enable cryptocurrency trading. Providers like DLTify have gained prominence by facilitating secure and risk-free crypto transactions on the blockchain.
Many national governments are beginning to realize the utility of integrating Bitcoin into voting systems. The reason is that no one can remove data stored on the blockchain. Therefore, it is the perfect tool for preventing electoral manipulations or malpractices. Also, because the blockchain network is distributed, citizens can gain access to election results in real-time.
Healthcare systems are gradually moving from manual systems towards digital systems, and blockchain is driving the transformation. With blockchain technology, patients’ data can be safely stored and time-stamped. This use reduces the risk of losing such records to events like fire outbreaks. It also enables the speedy sharing of patients’ records across different medical institutions.
Clearly, the hype behind blockchain technology is not baseless. There are immense opportunities that are provided by technology. Therefore, more countries need to embrace blockchain and its numerous potentials.