What is Blockchain Technology?
Blockchain is a splitted ledger, a method of recording various information with which it is not possible or difficult to hack, change or escape any system. Blockchain information is being shared or is distributed with the entire network of their Blockchain.
Blockchain technology is a digitally shared/distributed, decentralized, immutable, distributed/public ledger that stores or facilitates the records.
Blockchain gathers all the information in various groups which is known as BLOCKS. These blocks hold all the information. Blocks can’t hold an unlimited amount of data or information if it has it’s storage capacity. As one block is filled that particular block gets attached to the previous block automatically. As a block is filled it becomes hard like stone. Blocks are linked via cryptography.
Blockchain implies name, structure, blocks(which are chained or linked together) whereas when we talk about databases it implies the structure of the database.
Types of Blockchain Technology
Various types of blockchain are:-
Public Blockchain is a type of Blockchain where anyone can participate, we can also say that no permission is needed to participate in this.
In Public Blockchain there are more than one entity and it contains a decentralized structure.
In a private blockchain there is a network of administrators and in this blockchain one needs to take permission to enter the network.
It is highly efficient, faster in transactions, focuses on privacy, and also is scalable.
Hybrid blockchain is basically a combination of both public and private blockchain. Also it can utilise the ideal part of private and public blockchain.
All the transactions done in Hybrid Blockchain are private but we can also access it by enabling it’s access.
Consortium is a semi-decentralized blockchain network. In this no member is granted even a single entity.
Instead of that entities are transferred in a group or nodes.
How does blockchain work?
In Blockchain technology the blocks in it are connected in a peer-to-peer form of network.
Blockchain enables the trust of various traders as it provides a secure environment.
All the partners or the members in a particular chain maintain an encrypted form or record of every transaction.
Any company doing business needs a secure and real-time network.
Elements of Blockchain
The elements of Blockchain are as follows:-
Distributed Ledger Technology
With Distributed Ledger Technology all the participants in the group have access to the recorded transactions. Duplication is eliminated from transactions as transactions are recorded once.
Changes cannot be done in any transaction by any participant once the transaction is recorded. If any error is found in the transaction a new transaction should be recorded to reverse or remove the transaction error.
Smart Contracts are nothing else but a set of regulations used to speed up transactions. It can define conditions for corporate, also invokes terms for travel insurance to be paid etc.
Advantages of Blockchain
Transactions can be done easily and faster with the help of blockchain.
You will get a high level of security so business will be protected properly.
Transactions can be tracked easily so they are transparent.
Blockchain also offers decentralized structure.
It provides improved security, privacy and reduced costs.
Disadvantage of Blockchain
The main drawback of blockchain is it’s scalability is weak.
In blockchain technology doesn’t last forever.
It can lead to cyber threats, especially from internal actors.
The process to get standardized and mature is long.
As the data of blockchain is immutable it can’t go back.