Understanding Blockchain

A blockchain is, in the simplest of terms, a time-stamped series of immutable records of data that is managed by a cluster of computers not owned by any single entity. Each of these blocks of data (i.e. block) is secured and bound to each other using cryptographic principles (i.e. chain).

In other words, the blockchain is a unique distributed record that stores data and verifies its integrity. By using a different set of cryptography-based technologies, Blockchain assures that transactions continued into the blockchain database which is stable.

It is extremely important to understand that - Blockchain is not limited to just currency but enlarges to any domain where anything of value is transacted, be it contracts, personal information, health records, business data and much much more.

So, what is so special about it and why are we saying that it has industry-disrupting capabilities?

The blockchain network has no central authority - it is the very definition of a democratized system. Since it is a shared and immutable ledger, the information in it is open for anyone and everyone to see. Hence, anything that is built on the blockchain is by its very nature transparent and everyone involved is accountable for their actions.

A blockchain carries no transaction cost (an infrastructure cost yes, but no transaction cost). The blockchain is a simple yet ingenious way of passing information from A to B in a fully automated and safe manner. One party to a transaction initiates the process by creating a block. This block is verified by thousands, perhaps millions of computers distributed around the net. The verified block is added to a chain, which is stored across the net, creating not just a unique record, but a unique record with a unique history. Falsifying a single record would mean falsifying the entire chain in millions of instances. That is virtually impossible. Bitcoin uses this model for monetary transactions, but it can be deployed in many other ways.

Think of a railway company. We buy tickets on an app or the web. The credit card company takes a cut for processing the transaction. With blockchain, not only can the railway operator save on credit card processing fees, it can move the entire ticketing process to the blockchain. The two parties in the transaction are the railway company and the passenger. The ticket is a block, which will be added to a ticket blockchain. Just as a monetary transaction on the blockchain is a unique, independently verifiable and unfalsifiable record (like Bitcoin), so can your ticket be. Incidentally, the final ticket blockchain is also a record of all transactions for, say, a certain train route, or even the entire train network, comprising every ticket ever sold, every journey ever taken.

But the key here is this: IT IS FREE.?Not only can the blockchain transfer and store money, but it can also replace all processes and business models which rely on charging a small fee for a transaction.?Or any other transaction between two parties.