Blockchain technology is often wrongly used interchangeably with bitcoins, but that is far from the truth. While cryptocurrency is one way in which the technology can be used, there are several other applications of the same, including in the fields of supply chain management, finance, etc. If the reader is considering using one of the products of this technology, they may want to know the basics of how does blockchain technology works. This article will now go into the basics of the same.
What is blockchain technology?
A blockchain is basically a secure, powerful, and decentralised digital ledger. The ledger is run by a number of participants who together work on a shared goal. The nodes controlled by these participants are called blocks, and together they form the blockchain.
The blocks are chained together using a signature to make the ledger secure from these participants themselves. The reader must note that all the blocks will have other blocks go either side.
The information is contained within these blocks only. What the ‘information’ is depends on the purpose for which the application is used.
It must be noted that there is no limit to the number of blocks in a chain, and the new blocks can always be added to it.
The above is too simplistic an explanation that tries to put the principle behind blockchain technology in layperson’s terms.
Why is this technology so exciting?
There are several reasons why blockchain technology is gaining so much attention. These include:
- It is safe. As the various blocks act as checks on each other along with several other checks, blockchain technology is one of the safest technologies and relatively free from threats by hackers.
- It is a great way of storing private information. As the reader probably already knows, privacy rights are gaining a lot of attention these days. And MNCs are trying to come up with the best ways to keep private information safe. Encryption, specifically end-to-end encryption, is one such way customers are assured that their data won’t be used by companies. With blockchain technology, the companies can store customer data that they do accept in such a way that it is not threatened by malicious intruders.
- Various businesses themselves have sensitive information or trade secrets that they may not want to share even with those in charge of maintaining them. Blockchain technology can be used to ensure that.
- It is also gaining popularity because of its use in building cryptocurrency.
Why should the reader be interested in cryptocurrency?
The various possible applications of blockchain technology are just being realised. The reader may be interested in one of the several ways this technology can be deployed. And thus, they may benefit from learning the basics of blockchain technology.
Wrapping up
The experts are of the opinion that blockchain technology is here to stay and is going to find applications in numerous fields that are yet to explore their potential.
