A blockchain is a digital ledger of transactions maintained by a network of computers in a way that makes it difficult to hack or alter. The technology offers a secure way for individuals to deal directly with each other, without an intermediary like a government, bank, or other third party.
A list of records, called blocks, is linked together using cryptography. Each transaction is independently verified by peer-to-peer computer networks, time-stamped, and added to the ledger. Once recorded, the data cannot easily be altered.

While popularised with the growing use of Bitcoin, Ethereum, and other cryptocurrencies, blockchain technology has promising applications for legal contracts, property sales, medical records, and any other industry that needs to authorise and record a series of actions or transactions.

Types Of Blockchain Technology

Public Blockchain

Public blockchains are unlimited, transparent, permissionless, and fully distributed ledgers. No individual or entity controls the blockchain and the transactions that are recorded on the blockchain. Anyone can view transactions on the public blockchain. Transactions are added to the blockchain with the help of a consensus algorithm. Examples of public blockchains: are Bitcoin, Ethereum, or Litecoin. 

Private Blockchain

A private blockchain is centralised and restrictive, and users require permission to connect. Work in a closed network. Controlled by companies to record their sensitive business data so that it is not visible outside the organisation. Transactions are private and only available to authorised users on a closed network. Private blockchain examples: hyper ledger.

Hybrid Blockchain

A hybrid blockchain consists of a private and a public blockchain. It combines the permissioned feature of a private blockchain with a public blockchain’s security and transparency feature. Access control decides which users can view data on the blockchain or add data to the blockchain. Suitable for businesses that give them the flexibility they need to operate securely and transparently.

Consortium Blockchain Network

These blockchain networks are governed by a group of organisations. These organisations are responsible for maintaining the blockchain and deciding who can access the data. Consortium blockchain networks are particularly appealing to industries where many organisations share common goals and can benefit from working together. The Global Shipping Business Network Consortium is an example of a not-for-profit blockchain consortium that aims to digitise the shipping industry and increase collaboration between maritime industry operators.

Benefits And Importance Of Blockchain Technology

Blockchain Technology incorporates several highly advanced technologies to ensure your money’s complete safety and security. With improved features, BlockChain is irresistibly diverse.

Transparency

The transparency in the transaction makes blockchain one of the most trusted software. There are different types of blockchains. Public blockchain offers transparency due to its features. This technology operates in various aspects of our society, including elections.

Immutability

Its immutability opens up several opportunities for platforms that require immutable properties to make their system more advanced and functional to compete in the market. For example, you can take chain stock. Immutability allows the company to ensure that no obstacle will continue to exist during transit.

Digital Freedom

This technology offers digital freedom. You can be pleased with centralised entities that offer connectivity related to the economy. You can take your bank, for example. The bank can block all transactions or freeze the account if it sees fit. However, when you consider blockchain, you can see that there is no centralised authority.

Easy to use

For a knowledgeable person, using blockchain technology is not difficult. Blockchain is not limited to one specific use case. For its ease of use, it can be used in every sector, such as banking, trade finance, government, healthcare, petroleum, education, etc.

Highly secure

This technology uses cryptography to add another layer of security to information storage networks. Blockchain provides better security than other networks. It uses complex mathematical algorithms to ensure maximum security.

Increased Efficiency

Lastly, improving efficiency is one of the most important reasons blockchain is so important. Better security, intermediate removal procedures, and improved technology make it one of the most trusted means. Transactions only take seconds to complete, not a week or two. International transactions have also become easier.

Understanding the Key Terminologies of Blockchain Technology

Ledger : The ledger records transactions such as payment, supply chain details, medical, real estate contracts, etc.

SHA-256 : SHA-256 is a cryptographic algorithm that accepts input of any length, deterministically encodes the data, and returns a hash of 256 bits or 64 characters. The SHA-256 hashing algorithm ensures that the output can never be tracked back to the input, making it very secure.

Mining : It is the process of verifying and recording new transactions on the blockchain performed by Miners, for which they have special mining software.

Node : A node in a blockchain can be any electronic device that is part of a peer-to-peer network and maintains its copy of the blockchain.

The Merkle Tree :

 A Merkle tree is also called a “hash binary tree,” a data structure for storing transactions in the blockchain efficiently and securely.  Merkle tree summarises all transactions in a block by creating a digital fingerprint of the entire set of transactions. It is created by repeatedly hashing a pair of transactions from the bottom until we have only one hash, referred to as the Root Hash or Merkle Root.
Merkle trees are used in the blockchain to store transactions because they allow users to use the root hash to verify that a transaction was part of a block. A Merkle tree requires little memory, is computationally fast, and only a small amount of information .

Applications Of Blockchain Technology

Food Safety

Walmart works with IBM to improve the tracking and traceability of food products, leading to better food safety. When integrated with the latest data collection technologies, blockchain has huge potential in the food industry. Based on the respective strengths of blockchain and the Internet of Things (IoT), we can revolutionise the food industry. IoT solutions connect the physical and digital worlds, capturing data such as temperature and humidity during product transport or storage. Blockchain provides a secure and immutable platform where all participants in the supply chain can store and access this data.

Global Money Transfer

The title registry system uses blockchain to make title issuance instantaneous. A blockchain is a form of digitally distributed ledger that forms a database. Its main characteristic is that it is immutable. Therefore, the information entered in the ledger cannot be deleted, modified, or altered. Blockchain technology has the power to wipe out any third-party intermediary that works for the real estate industry.

Real Estate Title Issuance

The title registry system uses blockchain to make title issuance instantaneous. A blockchain is a form of digitally distributed ledger that forms a database. Its main characteristic is that it is immutable. Therefore, the information entered in the ledger cannot be deleted, modified, or altered. Blockchain technology has the power to wipe out any third-party intermediary that works for the real estate industry.

Supply Chain

Based in Singapore, VeChain has created a blockchain-based permissioned supply chain that monitors products moving from manufacturer to store shelf. Blockchain can provide greater supply chain transparency and reduce costs and risks throughout the supply chain.

Difference Between a Blockchain Ledger and a Database

Both the database and Blockchain record transactions, but the database is centralised and has a single point of failure. In contrast, Blockchain is decentralised and distributed across multiple nodes in the network. Each node in the blockchain network collectively participates in a consensus algorithm using Proof-of-Work. Databases are owned by a central office, company, or government institution that controls access by granting different roles to different users. Blockchain, on the other hand, is a peer-to-peer network where every node can connect to every other node. A secure cryptographic protocol like SHA-256 connects the blocks in the chain.

Future Of Blockchain Technology

While the Bitcoin system is the best-known application of blockchain technology, there are thousands of cryptocurrencies that are built on the back of this emerging technology. While it remains to be seen if Bitcoin will succeed in supplanting other forms of traditional payment methods, the applications of blockchain technology are growing fast, and proponents say they may lead to dramatic changes across industries.

Conclusion

Blockchain Technology is a safe, immutable, peer-to-peer distributed ledger that is decentralised. It consists of a secure block linked in a chain and replicated across multiple nodes connected in a blockchain network. Public, private, and hybrid blockchains can be used based on the useful features of blockchain technology.