Blockchain technology is a viable disruptor for markets including payments, cybersecurity, and healthcare because no data stored there can be changed.
What Is Blockchain Technology?
Through the use of a decentralised network and cryptographic hashing, blockchain, also known as distributed ledger technology (DLT), makes the history of any digital asset transparent and unalterable.
It's easy to understand how blockchain technology works by making the comparison to a Google Docs page. A Google Doc is not duplicated or transferred when it is shared with a group of people; rather, it is simply distributed. As a result, a decentralised distribution network is established, allowing everyone to simultaneously access the basic document. All changes to the document are logged in real-time, making them entirely transparent, and no one is locked out while waiting for updates from another party.
WHAT BLOCKCHAIN MEANS: WHAT BLOCKCHAIN MEANS
A blockchain is a type of database or digital ledger where encrypted blocks of data about digital assets are kept and chained together to create a time-based single source of truth for the data.
Instead of being copied or transferred, digital assets are distributed.
Because digital assets are decentralised, several parties can govern them and access them in real time.
Blockchain ledgers are transparent; all modifications are recorded, upholding credibility.
Blockchain technology is a top choice for practically every industry since its ledgers are open to the public and built with built-in security features.
Blockchain: Why Is It Important?
Due to its ability to scale transparency, eliminate fraud, and reduce security threats, blockchain is an incredibly revolutionary and exciting technology.
Blockchain technology gained notoriety through its connection to cryptocurrencies and NFTs, but it has subsequently developed into a management tool for a variety of international companies. Blockchain technology is currently being used to innovate games, secure healthcare data, provide transparency for the food supply chain, and fundamentally alter how we manage data and ownership.
What Is Decentralization in Blockchain?
Decentralization is one of the key ideas behind blockchain technology. The chain cannot be owned by any one computer or entity. Instead, it functions as a distributed ledger through the network's chain of nodes.
Every node has a unique copy of the blockchain, and for the chain to be updated, trusted, and confirmed, the network must algorithmically approve every newly mined block. Due to the transparency of blockchains, every transaction in the ledger can be easily verified and inspected, resulting in built-in blockchain security.
The blockchain is able to maintain integrity and foster user trust by fusing public information with a system of checks and balances. Blockchains are essentially the scalability of trust through technology.
Blockchain vs Cryptocurrency:
Cryptocurrencies may be the most well-known (and contentious) application of blockchain. Digital currencies (or tokens) like Bitcoin, Ethereum, or Litecoin are examples of cryptocurrencies. These currencies can be used to pay for products and services. Cryptocurrencies can be used to pay for anything from your lunch to your future house, just like a digital version of currency. Online transactions are always tracked and secured because, unlike cash, cryptocurrencies employ blockchain to serve as both a public ledger and an improved cryptographic security system.
For instance, although the terms "Bitcoin" and "blockchain" are sometimes used interchangeably, they nonetheless relate to different things. In 2009, Bitcoin, a distributed ledger-based cryptocurrency system, became the first blockchain application. As a result, Bitcoin became the original "blockchain." Both entities came together because of the blockchain feature that is being utilised to store this new digital currency, which helped them gain notoriety quickly. The Bitcoin cryptocurrency only describes the currency itself, whereas the Bitcoin blockchain only explains the technology that houses the cash.
To date, there are more than 20,000 cryptocurrencies in the world that have a total market cap around $1 trillion, with Bitcoin holding a majority of the value. These tokens have become incredibly popular over the last few years, with the value of one Bitcoin fluctuating between several thousands of dollars.
Here are some of the main reasons behind cryptocurrency’s recent popularity:
- Blockchain’s security makes theft much harder since each cryptocurrency has its own irrefutable identifiable number that is attached to one owner.
- Crypto reduces the need for individualized currencies and central banks. With blockchain, crypto can be sent to anywhere and anyone in the world without the need for currency exchanging or without interference from central banks.
- Cryptocurrencies can make some people rich. Speculators have been driving up the price of crypto, especially Bitcoin, helping some early adopters to become billionaires. Whether this is actually a positive has yet to be seen, as some retractors believe that speculators do not have the long-term benefits of crypto in mind.
- More and more large corporations came around to the idea of a blockchain-based digital currency for payments. In February 2021, Tesla announced that it would invest $1.5 billion into Bitcoin and accept it as payment for their cars.
Of course, there are many legitimate arguments against blockchain-based digital currencies. First, crypto isn’t a very regulated market. Many governments were quick to jump into crypto, but few have a staunch set of codified laws regarding it. Additionally, crypto is incredibly volatile due to speculators. Lack of stability has caused some people to get very rich, while a majority have still lost thousands of dollars.
Whether or not digital currencies are the future remains to be seen. For now, it seems as if blockchain’s meteoric rise is more starting to take root in reality than pure hype. Though it’s still making headway in this entirely-new, highly-exploratory field, blockchain is also showing promise beyond Bitcoin.
What Is a Blockchain Platform?
A blockchain platform is a means by which users can communicate with a blockchain and its network, as opposed to a blockchain network, which describes the distributed ledger technology. Blockchain platforms are developed to be scalable and to function as extensions of an existing blockchain infrastructure, enabling data interchange and service powering straight from this framework.
Ethereum, a software platform that holds the cryptocurrency known as Ether, is an illustration of a blockchain platform. Users of the Ethereum platform can also develop smart contracts and programmable tokens that are directly based on the Ethereum blockchain technology.
WHAT IS TOKENS?
Any type of digital asset can be represented by a token, which Ethereum programmers can then use to track ownership and carry out specific functions.
Music files, contracts, concert tickets, or even a patient's medical records are examples of tokens. Non-fungible tokens (NFTs) have gained popularity in recent years. NFTs are distinct tokens built on the blockchain that store digital media (like a video, music or art). Each NFT has the capacity to confirm the item's original ownership, history, and authenticity. Because they enable a new generation of digital creators to buy and sell their works while receiving correct credit and a fair share of earnings, NFTs have become enormously popular.
