I’m sure you have heard of the word “Blockchain” quite often in recent years. But, what exactly is Blockchain?
Being the primary infrastructure behind Bitcoin, Blockchain tech is often described as a digital spreadsheet or ledger that keeps records in a transparent way with no central data storage. It allows two parties to transact with each other directly without a trusted third party.
So, here’s how it works.
Whenever a transaction is requested, it will be broadcasted to a P2P (peer-to-peer) network consisting of computers, which is generally known as” nodes”. The network of nodes authenticates the transaction, which is then combined with other transactions to create a new block of data for the ledger. The new block is added to the existing blockchain in a permanent and unchangeable way.
Why Blockchain is more secure than the traditional bank system?
Imagine this, if you want to sell your house to your friend, both you and your friend must go to the bank to jointly approve the transaction because the bank is the centralized database that stores your account information. It verifies the authenticity of the transaction, records it, and updates your account accordingly. When the bank has its own rules and policies to govern the handling of money, it is almost impossible for customers to prevent manipulation and bank system tampering.
It is when Blockchain technology comes into play. It eliminates the need for a third party to facilitate transactions. When a valid transaction takes place, the nodes will recognize it and provide a permanent stamp of approval. If someone tries to transfer money fraudulently, the nodes will halt the transaction immediately.
What can Blockchain be applied to?
Blockchain can greatly benefit and be applied to many different areas and it is expected to have a broader impact on our society.
It can be associated with real estate transactions, finance, smart contract, smart property, and even public utility services such as smart parking, and even data-driven city management.
Although the potential of Blockchain applications is still unfolding, it is almost certain that, in the near future, Blockchain will be applying to all aspects of society and revolutionize how our society functions.