Blockchain technology is a great invention. You may have heard about blockchain before. Today we will look at the basics of a blockchain. It’s not an everyday term so we will go step by step and try to cover all the basics in limited words.
Blockchain was invented by Satoshi Nakamoto in 2008 to serve as the public transaction ledger of the cryptocurrency. The interesting thing to know here is that nobody knows who is Satoshi Nakamoto? According to Wikipedia, Satoshi Nakamoto is the name used by the unknown person or people who developed bitcoin.
What is Blockchain Technology?
The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value – Don & Alex Tapscott
So what does it mean? The blockchain is like a distributed database in which thousands of computers takes part. Each computer is connected with each other and every computer keeps the record of the transaction. Each and every detail including the timestamp is stored in every computer in encrypted form. Using this technology you can transfer cryptocurrency from one person to another without using any third party service to any place around the world. Using normal bank service may take 2-3 days of time for the complete transaction. The transaction fee is very less when compared to other money transfer services.
The basic concept behind blockchain is to apply distributed servers rather than a single server. Even if a hacker attacks one of the servers to change data then he/she has to change data of every single computer that are connected. So basically, every computer or blocks are connected or chained together. These systems are more trustworthy and difficult to breach. We generally use this technology to transfer virtual currency or cryptocurrency but can be adopted for everyday payments too.
- More record of transaction history, as blockchain is a distributed ledger and the same document is stored in every computer in the network.
- Faster and efficient transaction. In a traditional transaction, there is a need of paperwork and that consumes times. But with blockchain, we can transfer money to anyone around the world.
- It is cheaper. In traditional banking systems,p there is a middleman involved and it charges some fees from your transaction. But in blockchain technology, there is no role of a bank.
- More security, as it is a centralized system breaking into systems becomes difficult. We are trusting each and every computer in the system rather than one single system. It is easily traceable and records each and every detail of a transaction.
Blockchain provides a platform to perform a secure transaction in a short period of time. This technology can be used for e-voting. Blockchain technology could allow records to be created and verified with a greater level of speed, security, and transparency. Several countries including Ghana, Kenya, and Nigeria have begun to use blockchains to manage land registries. It is a much-required technology and has a future but is difficult to adopt. Implementing blockchain can change everything and can be expensive too. Countries like India cannot implement blockchain to replace traditional banking as the new technology requires a lot of resources. India ranks 81 in the global corruption index. Implementing blockchain will allow complete freedom of money transfer as money is transferred directly to the receiver. So maybe the banking sector is not ready but can be utilized for some other purpose.