Understanding Blockchain Became Easier


Blockchain came into existence in 200 by Satoshi Nakamoto. His purpose was to create a digital ledger for online transactions mainly revolving around cryptocurrency Bitcoin. Blockchain is basically a recordkeeper of digital currencies or cryptocurrencies like Bitcoin.

In the case of physical currency, there is a direct step. You use your card to pay a certain amount, the machine that receives the payment verifies your card with the help of your bank, and the payment is successful. This method is called centralization, there is only one getaway to verify your payment. In the case of digital payment, or digital currency, your payment undergoes a few steps of verification, called as blocks before the final payment. This method is called the decentralization. And, the blocks form a blockchain.

Understanding Blockchain Became Easier
Understanding Blockchain Became Easier

Definition Of Blockchain

Digital information stored in a public database if you go by definition. Block is the digital information and public database is the chain.

  • There are 3 parts :
  • Storage of information about your recent most transactions such as date, time, amount you spent and where you spent.
  • The entities participating in the transaction, say, for instance, you and eBay.
  • Naming a block using a unique code known as ‘hash’ which helps differentiate between many blocks.
Understanding Blockchain Became Easier
Understanding Blockchain Became Easier

Know Cryptography

Cryptography is a method of creating a secret language in the form of codes that only the giver and receiver can intercept. This form of language is ideal to protect digital data and encrypting transactions.

Bitcoin transactions have reached a value of more than 1 trillion dollars. These transactions are safe due to cryptography and you don’t have to pay any tax here.

Types Of Blockchain

Public blockchains: There are no restrictions to access. Anyone with an internet connection can send transactions. Bitcoin and Ethereum are examples of public blockchains.

Private blockchain: You can join this network only if you are invited by a network administrator.

Hybrid blockchain: A mix of public and private having both decentralized and centralized features.

Consortium blockchain: Also known as Federated type. Here members are formed by prior voting format. It is similar to a private.

Uses Of Blockchain:

Blockchain – Healthcare Services

In the field of healthcare services in the form of storing patients’ medical records. Medical records are under the protection of password security and are accessible with the blockchain technique.

The bedrock for Bitcoin as there is no central dependency over a single entity like a bank account for your money.

To Avoid Election Fraud.

  • Apart from Bitcoin, there are also many other cryptocurrencies based upon the blockchain model, for instance, Ethereum, Z-cash, Dogecoin, Litecoin, Monero, Dash, Nxt, and Peercoin.

Understanding Blockchain Became Easier

Advantages

  • There is no chance of fraudulent transactions, as they are verified by blocks and change in one block will lead to a mismatch between two blocks.
  • Transactions are easier due to the easy requirement of blockchain requirements.

Disadvantages:

  • Since transactions are anonymous, they are responsible for illegal activities, for instance, weapons, drugs, etc, etc.
  • Since the verification algorithm for transactions requires a lot of computing power, it leads to very high energy usage by the PCs and GPU.
  • Also, it leads to the increased cost of GPUs as their demand increases and supply doesn’t match.
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