What is blockchain?
Blockchain technology is most simply defined as a decentralized, distributed ledger, makes the history of any digital asset unalterable and transparent with decentralization.
Now the question is what exactly is a digital ledger? Distributed ledger or to be more specific Distributed ledger technology (DLT) is a digital system for recording the transaction of assets in which the transactions and their details are recorded in multiple places at the same time. Unlike traditional databases, distributed ledgers have no central data store or administration functionality.
In simple language a blockchain is a database but it differs from a traditional database in that the information stored on it is not centralized in one location. Instead, a record of the ledger is held by all of the participants in the chain that can verify the provenance of all of the data that is entered. Think of it as a database without an administrator. This means that participants don’t have to rely on any single individual or entity as for the veracity of data.
By inherent design, the data on a blockchain is unable to be modified, which makes it a legitimate disruptor for industries like payments, cybersecurity and healthcare.
A simple analogy for understanding blockchain technology is a Google Doc, Of course, blockchain is more complicated than a Google Doc. How?
When we create a document and share it with a group of people, the document is distributed instead of getting copied and then transferred. This creates a decentralized distribution chain that gives everyone access to the document at the same time. No one is locked out awaiting changes from another party, while all modifications made to the doc are being recorded in real-time, making the changes completely transparent.
Blockchain is a better, safer way to record activity and keep data fresh, while maintaining a record of its history. The data can’t be corrupted by anyone or accidentally deleted, and you benefit from both a historical trail of data, plus an instantly up-to-date record. Blockchain brings trust, accountability, and transparency to digital transactions. All transactions that exist on a blockchain are shared and distributed among a network of peer-to-peer computers. Transactions are encrypted before they are stored and shared.
The whole point of using a blockchain is to let people — in particular, people who don’t trust one another — share valuable data in a secure, tamperproof way.
Brief Description
A blockchain collects information together in groups, also known as blocks, that hold sets of information. Blocks have certain storage capacities and, when filled, are chained onto the previously filled block, forming a chain of data known as the “blockchain”. All new information that follows that freshly added block is compiled into a newly formed block that will then also be added to the chain once filled.
In a blockchain, each node has a full record of the data that has been stored on the blockchain since its inception. For Bitcoin, the data is the entire history of all Bitcoin transactions. If one node has an error in its data, it can use the thousands of other nodes as a reference point to correct itself. This way, no one node within the network can alter information held within it. Because of this, the history of transactions in each block that make up blockchain irreversible.
Combining public information with a system of checks-and-balances helps the blockchain maintain integrity and creates trust among users. Essentially, blockchains can be thought of as the scalability of trust via technology.
Blockchain stands to make business and government operations more accurate, efficient, secure, and cheap with fewer middlemen.
Practical Example
With Amazon Managed Blockchain, customers get secure networking, fast and reliable syncs to the Ethereum blockchain, durable elastic storage for ledger data, encryption at rest and transport, and secure access to the network via standard open-source Ethereum APIs. Worldwide organisations have realised that a more decentralised approach is required to address digital business infrastructure requirements Few of the many blockchain applications to know :
- Secure sharing of medical data
- NFT marketplaces
- Music royalties tracking
- Cross-border payments
- Real-time IoT operating systems
- Personal identity security
- Anti-money laundering tracking system
- Supply chain and logistics monitoring
- Voting mechanism
- Advertising insights
- Original content creation
- Cryptocurrency
- Real estate processing platform
Key Points
- A blockchain is a database that stores encrypted blocks of data then chains them together to form a chronological single-source-of-truth for the data
- Digital assets are distributed instead of copied or transferred, creating an immutable record of an asset
- The asset is decentralized, allowing full real-time access and transparency to the public
- A transparent ledger of changes preserves integrity of the document, which creates trust in the asset.
- Blockchain’s inherent security measures and public ledger make it a prime technology for almost every single sector
- A blockchain is a database that stores encrypted blocks of data then chains them together to form a chronological single-source-of-truth for the data
- Digital assets are distributed instead of copied or transferred, creating an immutable record of an asset
- The asset is decentralized, allowing full real-time access and transparency to the public
- A transparent ledger of changes preserves integrity of the document, which creates trust in the asset.
- Blockchain’s inherent security measures and public ledger make it a prime technology for almost every single sector