Blockchain explained to the layman

The term blockchain may be confusing at first read. At some point in time, you all might have wondered what is Blockchain? How does it work? What are its benefits?

Well, Blockchain is most widely associated with cryptocurrencies like Bitcoin and is sometimes used to refer to cryptocurrencies. But it is far more than cryptocurrencies. And even though the terms are often used interchangeably they aren’t the same thing.

Blockchain is the technology that most cryptocurrencies are built on, and it’s now also being used for many other applications. In this article, we will discuss, the Meaning and Working of Blockchain, and what are the uses of Blockchain as an innovative technology.

Understanding Blockchain

?Blockchain is a distributed database existing on multiple computers at the same time. It is constantly growing as new sets of recordings, or ‘Blocks’, are added to it. Each block contains a timestamp and a link to the previous block, so they actually form a chain.

The database is not managed by any particular body; instead, everyone in the network gets a copy of the whole database. Old blocks are preserved forever and new blocks are added to the ledger irreversibly, making it impossible to manipulate by faking documents, transactions, and other information.

Blockchain is decentralized and not stored on a single master computer or controlled by one company, bank, or organization. Rather, it is distributed over many computers that are in the network. 

Why is it called Blockchain?

In simple Blockchain comprises of two words – One is Block and another one is Chain.

Block is nothing but a database that stores a lot of information.

For example, you were sending some Cryptocurrency to a person, A. For this transaction Block will store information like who is the sender, who is the receiver, when was the money sent and such other information regarding the transaction will be stored in that block. Now let’s say the same crypto is sold by A to B, then B to C., and so on until the block gets filled.

Once the block gets filled and the other block starts storing information, it will point out to the last transaction in the previous block using Hashrate i.e., it shows we are carrying forward or continuing from here. Now when this block gets filled and the third block starts, again it will point out to the last transaction of the previous or the second block.

All of these blocks will be linked or tied together just like it is tied with a chain. And that is why it is called as a blockchain.

Now say if you want to delete the data from one of the blocks, do you think it is possible?

No, you can’t because the blocks are interlinked. The third block is pointing towards the end of the second block and the second block is pointing towards the end of the first block. If any of the blocks goes away, it will be clearly understood that something is missing and that is why it is said that blockchain is immutable.

Uses of Blockchain

So now, you know that the data stored in Blockchain is Transparent, Accurate & Immutable, so what are the areas where we can use Blockchain as an Innovative Technology. Some of the most common applications of Blockchain technology are:

• Cryptocurrency exchange
• Smart Contracts
• Real-estate processing platform
• Secure sharing of medical data
• NFT marketplaces
• Financial Services
• Music royalties tracking
• Cross-border payments
• Supply chain and logistics monitoring
• Personal identity security
• Anti-money laundering tracking system
• Voting mechanism
• Original content creation
• Real-time IoT operating systems

The Bottomline

Blockchain was originally developed as the platform that bitcoin was built on. Now, it’s more transparent, decentralized, and secure as it grows and develops in new areas of business, such as banking and supply chain management. This technology can drive innovation for new ways of doing business and may be especially useful for companies where transparency and security are important.

In particular, small businesses can leverage platforms built on blockchain to streamline processes and payments. There are a few companies already offering this type of technology now, so expect to see many more in the future.

What are your thoughts about the technology of Blockchain? Do think Blockchain can disrupt the way we do business currently? Kindly, share your thoughts in the comments section below.