Blockchain technology was present for a long time in the Internet ecosystem, but earlier it was only associated with Bitcoin or Cryptocurrency as a whole. But it was in only recent years when developers found the flexibility of this technology. In this article I am going to explain about blockchain technology only conceptually not the implementation, so what is blockchain technology –
What is Blockchain Technology?
Blockchain is a technology that enables users to digitally move or transfers not only a digital currency but any valuable asset.
Goals of the Blockchain Technology
So you guys must be thinking what exactly this technology is aiming for? Well, the main goal of this technology is to create a Decentralized system. By doing that they could eliminate any third party validation company that stands between the two users to verify their identity and verify if the transaction is valid. So blockchain is attempting to solve or enhance the money transfer experience.
In a typical money transaction, suppose a person ‘A’ lives in China wants to send $5 to a person ‘B’ who lives in Canada, now in a typical transaction there is third trusted party which validates the transaction and verify both ‘A’ and ‘B’ as a trusted person. Now because of this, the transaction can take 3 days or more and person ‘B’ will receive $4.8 as the third trusted party charges some fees. What blockchain is attempting to solve is to do the transaction without the trusted entity resulting in the transaction taking place almost immediately and to do it for a cheaper rate.
Now you must be thinking if this technology eliminates the trusted entity in between, how is this transaction gonna be secure?
Here comes the interesting part, Blockchain uses the same concept to validate and secure the transaction as the banks or so-called third trusted party uses that is Ledger. But in case of blockchain, the ledger is open or public, aka Distributed Ledger7
As it uses open ledger, the transaction is not straight up added to the ledger it is first encrypted and configured into a ‘block’, to secure the transaction details.
Now let’s dive into how blockchain addresses this money transfer problem. The first concept that we are gonna talk about is the concept of decentralization.
What is a Distributed Ledger?
You can say ledger is a list of records of transactions, Ledger is also known as the foundation of accounting. Ledger is as ancient as writing and money. But after the invention of computers and the internet ledgers are maintained digitally generally by banks.
Distributed Ledger is a database held and updated independently by each node in a large network. Unlike the traditional ledger, there is no central authority controlling all the records. Instead, they are independently constructed and held by every node. That means every transaction is processed by every single node present on that network. These nodes then vote on the conclusions they came up with to make certain the majority agree with the conclusions.
After the successful transaction that transaction is added to the ledger, every node maintains its digital copy of the ledger. You can say that Open Ledger is the genesis of Blockchain Technology.
The Idea of Decentralization
Source – blockgeek.com
I think decentralized networks will be the next huge wave in technology.
By design, the blockchain is a decentralized technology.
Anything that happens on it is a function of the network as a whole. Some important implications stem from this. By creating a new way to verify transactions aspects of traditional commerce could become unnecessary. Stock market trades become almost simultaneous on the blockchain, for instance — or it could make types of record keeping, like a land registry, fully public. And decentralization is already a reality.
A global network of computers uses blockchain technology to jointly manage the database that records Bitcoin transactions. That is, Bitcoin is managed by its network, and not anyone central authority. Decentralization means the network operates on a user-to-user (or peer-to-peer) basis. The forms of mass collaboration this makes possible are just beginning to be investigated.
Is Blockchain Technology the Future of the Internet?
The blockchain is an undeniably ingenious invention – the brainchild of a person or group of people known by the pseudonym, Satoshi Nakamoto.
Blockchain was only used by Bitcoin but this technology has evolved into something greater since then. It has given birth to the backbone of the new type of internet by allowing Digital Information to be distributed but not copied. Bitcoin has been called “digital gold,” and for a good reason. To date, the total value of the currency is close to $9 billion US. The potential of this technology to transfer not just money but any asset is attracting more and more companies and developers to work on this technology and create a completely open and decentralized network.
Yes, undoubtedly the Blockchain Technology is the Future of the Internet. Or it’s more appropriate to say that its a backbone of a new kind of internet.
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