What exactly is Blockchain?

 


Advantages Of Integrating Blockchain Technology

The technological world has experienced rapid growth in recent years. With modern technologies, it has become easier for anyone to complete a process or program in just a few seconds. Like in this recent time period, individuals can send and receive money globally, that too without paying a lot as transaction fees. This all could happen because of Blockchain technology. 


If you have a keen interest in banking, investing, or cryptocurrency, then you surely would have come across the term blockchain. You surely would be curious to know what the hype is all about.


Let’s help you understand Blockchain Technology. 


The concept of Blockchain may appear to be complicated, but in reality, it is quite simple and easier to understand. It is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system. 


At its core, blockchain relies on a decentralized, digitalized and distributed ledger model. By its nature, this is more robust and secure than the proprietary, centralized models.


Blockchain technology is best known for its crucial role in cryptocurrency systems. In 2009, the technology was used to develop the world’s first cryptocurrency, Bitcoin. 


In the years since, the use of blockchains exploded via the creation of various cryptocurrencies, decentralized finance (DeFi) applications, non-fungible tokens (NFTs), and smart contracts.




How Blockchain Works?


Using the bitcoin system as an example, here’s how blockchain works:


  • The purchase and sale of bitcoin is entered and transmitted to a network of powerful computers, known as nodes.

  • The network of thousands of nodes uses computer algorithms to confirm the transaction.

  • As soon as the purchase is confirmed, the sale is added to a block on the distributed ledger.

The majority of the network must then confirm the sale.

  • The block is permanently chained to all previous blocks of bitcoin transactions,

using a cryptographic fingerprint known as a hash, and the sale is processed. 


Many people assume Blockchain and Bitcoin can be used interchangeably, but in reality, that’s not the case.

The technology is capable of supporting various applications related to multiple industries like finance, supply chain,

manufacturing, etc., but Bitcoin is a currency that relies on Blockchain technology to be secure.

Advantages Of Blockchain Technology


Compared to other traditional technologies, blockchain has many advantages:


  • Highly Secure- Technology uses a digital signature feature to process fraud-free transactions.

Also, the data on the blockchain is secured across a network of computers, making it nearly impossible to hack. 


  • Decentralized System- Usually, a person needs regulatory bodies' approval to process a transaction.

But blockchain technology eliminates their intervention and facilitate transaction with the mutual consensus of users.


  • Trust-  The enablement of trust is one of blockchain's most cited benefits. Its value

is evident in early blockchain use cases that facilitated transactions among entities that didn't have direct relationships
yet still had to share data or payments.


  • Reduced Cost- Blockchain exactly does not reduce the costs for organizations.

  • It creates efficiencies in processing transactions.

  • It also reduces manual tasks such as aggregating and amending data,

  • as well as easing reporting and auditing processes.


  • Speed- By eliminating intermediaries, as well as replacing remaining manual processes in transactions,

  • blockchain can handle transactions significantly faster than conventional methods. 








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