How Blockchain Works!!
Blockchain is the technology that underpins the digital currencies available in the digital market i.e. Bitcoin, Ethereum, Litecoin, etc. This technology allows digital pieces of information to get distributed. But it does not allows them to be copied. So Blockchain ensures that every individual piece of data can have a single owner only.
Sometimes Blockchain is also called a “Digital Ledger” stored and distributed via Network.
A simple understandable definition can be found in Blockgeeks that helps to understand the basic work process of Blockchain works:
“Picture a spreadsheet that is duplicated thousands of times across a network of computers. Then imagine that this network is designed to regularly update this spreadsheet and you have a basic understanding of the blockchain.”
In this technology, pieces of information are continuously reconciled into a database. The database is stored in multiple locations and whenever any information updates the database is also updated instantly. This means all the records are for public viewing and anyone can verify any record. The main strong point of this system is “there’s no central location”, thus it is harder to hack since all pieces of information exists simultaneously in hundreds of places or servers.
Blockchain is a revolutionary technology that was invented in back 2008’s, but it came into the public domain only after Bitcoin is launched.
Why The Name is Blockchain?
In this process, a particular block is a record of a completely new transaction. Whenever a transaction or a block is completed, it’s then added to the chain. Bitcoin miners or owners use a private password (a complex key) as an address on the chain, which is used as their ownership record. Crypto-currency transactions are like the distributed storage without a middle man — you don’t need a bank to verify the success of the transfer of money or give a cut to the middle agency for the transaction.
William Mougayar, the author of The Business Blockchain, described it this way:
Imagine two entities (ie. banks) that need to update their own user account balances when there is a request to transfer money from one customer to another. They need to spend a tremendous (and costly) amount of time and effort for coordination, synchronization, messaging and checking to ensure that each transaction happens exactly as it should. Typically, the money being transferred is held by the originator until it can be confirmed that it was received by the recipient. With the blockchain, a single ledger of transaction entries that both parties have access to can simplify the coordination and validation efforts because there is always a single version of records, not two disparate databases
Blockchain is used for more than just currency or some transactions. You can get an idea of how seriously it’s being studied and adopted, tech giant like IBM has put about 1,000 employees to work on blockchain-powered projects. They’ve even set aside a huge budget of $200 million for further development. A lot of Financial and Tech firms invested an estimated $1.4 billion dollars on blockchain in 2016 which is increased to $2.1 billion dollars in 2018.