WHAT IS BLOCKCHAIN TECHNOLOGY? | Advantages of blockchain
In this blockchain introduction article, we will learn:
what is blockchain technology?
what problems does blockchain technology solve?
what is an advantage of using blockchain technology?
Over the past few years, we are consistently listening about the topic of blockchain technology. In this article, I will explain you about the term “blockchain technology” in detail. This article would be very helpful for those who have curious about the term blockchain but did not have a piece of knowledge about this.
After reading this article you will be able to completely understand the meaning of what is blockchain in simple words and you would be able to answer this question .
“What problems does blockchain technology solve in today’s world?”
So let's start with our discussion on Blockchain technology...
Before speaking about what is blockchain technology?, lets discuss about the issues which can be resolved using block chain technology.
📌📌Issues faced in the current banking system which can be resolved through the use of this technology:
1. High transaction fee:
In order to do transactions from one bank to another bank in Today’s banking channel requires a high transaction fee from the sender. Suppose you want to transfer Rs 500 to your friend through an electronic transaction it requires a high amount of transaction fee. This transaction fee varies from bank to bank typically from (0.5 % to 5 %) of the total amount transferred.
Hacking is another important issue that is faced in the current banking system. Hackers gain unauthorized access to the user’s bank account and make fraudulent transactions to the bank account. you will be shocked to hear that, In 2017 the number of frauds in India through ATM cards and net banking totaled 1,785(each amounting to 1 lakh or more). So blockchain technology can be used to control this hacking issue.
Above two points tells us why use blockchain?
🤷♀️ What is blockchain?
Blockchain is a type of database.
It is made by two words BLOCK+CHAIN so you can think of blockchain as a list of records. To understand blockchain you should also know what is meant by database?
A database is a collection of information stored electronically on a computer system. It is an organized collection of information that can be managed easily.
Blockchain is a structure that stores transactional records of the public in several databases in the form of a block.
Suppose you have to transfer money from one bank account to another bank account. When you make a transaction from one account to another, there has to be a place where this transaction information should be stored. That place is known as a block in Blockchain.
🤷♀️🤷♂️What information does the block contain?
Block in blockchain technology contains the following information:
Who is transferring the money to whom?
what is the amount of money associated with that transaction?.
some other pieces of information such as digital signature, etc.
Technologically, blockchain is a digital ledger that is gaining a lot of attention recently.
ADVANTAGES OF BLOCKCHAIN TECHNOLOGY:
Given below are major advantages of blockchain technology:
Database and blockchain both are the lists of records but the database is a centralized and a single point of failure whereas blockchain is decentralized and less chance of failure as compared to a database. Blockchain is distributed on several nodes all over the network.
Blockchain technology uses the concept of the hash function to secure the data stored in the blocks. The blocks in the blockchain are write-once and append-only. Data stored in every block are secured with the SHA-256 algorithm that makes the modification in the data very difficult. this ability of blockchain prevents alteration of transactions.
🔓 Secure transactions:
Once a transaction is recorded, its authenticity is verified by thousands of computers connected across the internet. the transaction is recorded in the block only when it is verified by all the computers connected across the network.
Blockchain brings transparency to the transaction made all over the network.
Blockchain is a secure,peer-to-peer network that is decentralized .it has a lot of scope in future industry.
that's all in this article.👍👍👍👍👍thank you for reading.
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About the Author
I am a data science enthusiast. I love to learn new technology 🛠🛠.you can reach me at this url www.linkedin.com/in/ayushbajpai47
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