This (21st) century is all about innovation, creativity and technology. With the rising need for innovation in our day-to-day lives, people are interested in new technology. From remotely controlled devices to voice messages for commands, modern technology has made space in our everyday life. Technologies like virtual reality and IoT, which have intensified in the last era, and now there’s a wonderful addition to the race, Technology of Blockchain. Often known as tamper-proof technology.
What is blockchain technology?
Blockchain is a decentralized (Without central repository) ledger technology, which stores transactions in chronological order (Time Stamped) i.e. at the time these transactions occurred. It is highly immutable ledger that is being maintained by millions of nodes as of now. the reason for most of its popularity is because of its unlimited benefits. One of its benefits is that if you want to transfer goods using blockchain you don’t have to pay for any transaction fee! Sounds enchanting and confusing at the same time doesn’t it? Because of its this exciting feature banks will go bankrupt in the coming future if they didn’t pay attention to its compelling yet intriguing attributes.
What is the Worth of Blockchain?
Blockchain is an undoubted orchestration – the chief architect of a person or a group of individuals referred to as the pseudonym, Satoshi Nakamoto.
Blockchain wallet is worth $620 Billion in transactions since 2013.
With the very first modern Blockchain transaction, groundbreaking technology affecting various sectors has miraculously been implemented in the markets. Blockchain is the main infrastructure on which the world’s first digital currency is based, i.e. bitcoin. Bitcoin is nothing but a form of digital currency (cryptocurrency) that can be used for trading instead of paper currency. And the fundamental technology behind the popularity of cryptocurrencies is named Blockchain. Worldwide spending on blockchain solutions as of 2020: $4.3B which is expected to grow to $39B in 2025.
According to Statista spending on blockchain is increasing exponentially.
|Year||Spending on Blockchain|
|2020||$3.0B *as of Aug 2020|
the graph clearly shows the astonishing growth of blockchain over the years:
How much data a block can contain?
A single block on the Bitcoin blockchain can actually store around 1 MB of data.
If you are a computer geek you would know how much information can be stored in 1MB of storage. Imagine how much information a chain of millions of such blocks could absorb. It could even contain thousands of transactions to complete one block in the chain.
A Common Misunderstanding:
There is indeed a common misunderstanding amongst people that Bitcoin and Blockchain are both the same, but that’s not the case. Creating cryptocurrency is one of the applications of Blockchain technology and, apart from Bitcoin, there are many applications that are being formulated on the basis of blockchain technology. In the broadest sense, Blockchain can be defined as a data framework that holds transactional records while maintaining confidentiality, transparency, and decentralization. You can also think of it as a chain or a record stored in the form of blocks that are not controlled by a single absolute power.
Diff. Components of blockchain technology:
- Block-contains all information about the transaction like hashing, terms, etc.
- Chain-the hash which connects the blocks
- Agreement/consensus-all users must agree on some kind of contracts
- Node-a user or computer present in the network
- Transaction– a crucial part of the block
- Miners/verifiers-they verify that the transaction is valid/do the proof of work and get paid for it
How does blockchain work?
Well, the whole process of completing one block of the chain is divided into 3-steps:
- Storing Information
- Calculating the Hash (Cryptographic mechanism)
- Adding to the chain (Pointing the hash to the previous block)
The information completely depends on the type of blockchain. For example, if it is related to the medical field then the info could be:
- Patient’s Name
- Name of disease
- Date and time of check-up
- Receipt of the paid fee
It is nothing but a complex algorithm generating different alpha-numeric combinations for encryption purposes. Without this hash blockchain would be very easy to modify, making it totally unsafe and unworthy. It is by far the most important step in the whole process. Hash in the chain is like a fingerprint, as everyone has different fingerprints, the hash is also unique for every block. It is calculated every time a block is added, so if anyone try to tamper with one block has to tamper all the blocks because a slight modification in the block will lead to the different encryption key.
Adding (Block) to the chain:
After the hash has been calculated the block is then distributed to every node present in the network to verify that a transaction is really true. These nodes also confirm by consensus that they all received an un-altered transaction. Then it is confirmed and verified by every node on the network and after that, it is allowed to add to the chain.
Is it possible to change transactions in blockchain?
A blockchain is a distributed ledger that is entirely open to anyone on the network. When the information is stored on a blockchain, it is incredibly difficult to change or alter it.
Every transaction on a blockchain is protected with a digital signature that demonstrates its validity. Due to the use of encryption (called Hashing) and digital signatures, the data stored in the blockchain is immutable and cannot be modified.
Blockchain vs. Bitcoin
Bitcoin is nothing but a slight implementation of blockchain technology. It is very basic and one of the very first models of blockchain. The reason behind people confusing both is also because of the immediate implementation that bitcoin approached. Bitcoin is a digital currency that is shared using a distributed ledger system. Bitcoin is anonymous while blockchain is transparent. Bitcoin is just a cryptocurrency while blockchain is the technology on which cryptocurrency is built. There are different types of cryptocurrencies available these days. Some of them are listed below in the chart:
Blockchain technology will change the world in every possible way. According to Statista, approximately 36 % of respondents said their companies expected to spend more than five million U.S. dollars in blockchain in the next calendar year. This data shows the importance of blockchain in every field. It is being used worldwide in medical, automotive, food, aerospace and aviation industries, etc. We can also use blockchain in the vast field of the internet of things.