We hear a lot about blockchain these days, in both the technical and the business world. But what exactly is it? What is it about the technology that makes it so significant?
One thing that’s major tech innovations has always been about is decentralization. It’s an idea that any financial transaction can be stored and managed on a computer network. And this is where blockchain comes in.
Various blockchains have been created so far to meet different needs. The technology can be used in finance, health care, advertising, technology, and anything else that requires multiple parties to act as one. And with blockchain, it’s much easier to save data on the network.
In its most basic form, it’s a public ‘public’ and private ‘private’ blockchain or more commonly referred to as a DAC. Blockchains are just collections of entries, and they are recorded in blocks, also known as blocks. These blocks hold information that can be found in various places like the central database, the servers, and even other copies of the same data. The next block will store the same information.
From here, it will follow the same chain as the data is being stored. If one party makes a new entry, it will be added to the chain, and if another party has the same entry, then it will be removed from the chain. And this continues until it reaches the root chain.
This root chain is where all transactions and records from the ‘top’ of the chain are stored. When a transaction is made, the chain is extended with the date, time, and IP address of the person or device that sent the payment, and the ‘hash’ of the data.
A hash is essentially the string of information required todecrypt and match the data in the file or data being stored on the network. So, you can think of a hash as a unique cryptographic key.
Any transactions made on the chain need to be certified by a special operator, known as a validator. Each chain has its own trusted validators, and each one will verify the data before it is added.
The validity of the chain is affected by the data, and how it is recorded and stored. For example, when a person buys something online, the blockchain will store their order and subsequent transaction history. All the details of this are protected by a special kind of encryption technology called cryptography.
The blockchain is one of the biggest technological developments that’s happened in a long time. And it’s being used in a wide variety of applications now.
The fact that this technology is still in its infancy means that the price isn’t yet determined, but I am sure it will increase tremendously. This is because many companies will be coming out with blockchains to meet their needs. These include for marketing purposes, and for use in industry and banking applications.