Blockchain Technology: 10 Things You Should Know.

Blockchain is the hot new word in town. At its simplest form, a blockchain is a chain of blocks that hold data. Here are 10 things you should know about blockchain technology.

1. Blockchain is not Bitcoin

Blockchain has become synonymous with Bitcoin. This is because the introduction of Bitcoin brought blockchain technology to the world. That was back in 2008. The purpose of the blockchain at that particular point was to serve as a ledger for Bitcoin transactions. But since then, more and more cryptocurrencies have been introduced. All these cryptocurrencies use blockchain technology to process and record their transactions. Other cryptocurrencies apart from Bitcoin include Ethereum, Dogecoin, Litecoin, and so forth.

?2.??Blockchain is a decentralized database

Think of a blockchain as a ledger that stores information. However, instead of the ledger being held by one entity, this ledger is held by everyone on the network. No one entity or person controls the database. Due to its decentralized nature, a data breach is almost impossible. With blockchain, users do not have to worry about how their personal data is being used, because they are in control of the data.

?3.??Blockchain is used to build DApps

Blockchain is not just Bitcoin and other cryptocurrencies; it is a software technology that can be used to develop decentralized apps, otherwise known as DApps. So, simply put, a DApp is any application that runs on the blockchain or a P2P (peer-to-peer network). DApps have all the properties of a blockchain. They are not centralized; they are transparent and secure.

?4.??Blockchain can process transactions faster

What happens when you make a payment using a traditional banking system? It takes days for the transaction to be processed, especially if it is across country borders. Don’t forget the processing fees that you have to pay to the bank. Blockchain technology supports a Peer-to-Peer system that eliminates the middleman (financial institutions) from the transaction. Transactions are done between peers and are validated by the blockchain (nodes on the blockchain). This means that transactions are processed much quicker and are cost-efficient as you do not have to pay intermediary fees.

?5.??Blockchains are immutable

When a transaction is done and validated on the blockchain, its record becomes permanent. No one can go back to change the recorded transaction. Every block in the chain is linked to the previous block. To change one block, you have to change the previous block and then the previous block; an impossible task. This makes blockchain transactions highly secure.

?6.??Blockchains are highly transparent

Transactions on the blockchain are public. Anyone can access the information stored in the distributed ledger. Since anyone can see the transactions, there is very little need for regulations on the blockchain. Transparency makes auditing transactions on the blockchain extremely easy. It also reduces the risk of fraud.

7.??Blockchain transactions can be private or public

When you transact on the blockchain, you can decide if you want it to be public or private. When a transaction is public, it can be accessed by anyone with a computer and access to the internet. You can also make the transaction private. A private transaction is only accessible to people that you allow to be part of the transaction. While the public blockchain allows the entities involved to be anonymous, the private blockchain may require the identity of the parties involved to be disclosed.

?8.??Blockchain is open-source

Blockchain is open-source software. This means it is available to the public without any limitations. Anyone can access, modify, and share blockchain code. Anyone is free to build their own apps using blockchain software. You, the one reading this, can build your app using blockchain technology.

?9.?Banks and other financial institutions are adopting blockchain

Many financial institutions have realized that there is value to be gained by adopting blockchain technology. Blockchain reduces fraud, errors and makes financial transactions more transparent. Banks have departments that process payments and are a huge cost to the bank. This cost is passed on to the customer. By adopting blockchain technology, not only will transactions become cheaper, but they will also take less time to complete.

10.?Blockchain technology is here to stay

Blockchain technology is not a fad that we expect to disappear soon. It is here to stay. The adoption of blockchain technology by different industries is rampant. Blockchain is changing the way the banking and financial industries operate. Blockchain-based innovations are transforming the health sector, the transport industry, real estate, art, cybersecurity, and so many other industries. The blockchain has been described by many as the most disruptive technology of our time. While some jobs will disappear because of blockchain, new careers will be created for those willing to adapt. The bottom line is that you cannot ignore blockchain technology and you cannot stop it either. Take time to learn and understand blockchain technology.

Conclusion

There you have it, 10 things you should know about blockchain. If you have enjoyed this article and you are not part of the newsletter, please consider subscribing. I write about Python and other relevant tech issues.