For some years now ‘blockchain technology’ is a term constantly heard in the e-commerce market, especially regarding cryptocurrencies like Bitcoin. Blockchain technology has been growing ever since because of its user-friendly interface. In today’s technology-oriented world, Blockchain is one of the important features to know and learn.
Edureify, the best AI Learning app, in this article will talk about the details of Blockchain technology. Read on to know all about Blockchain Technology.
What is Blockchain Technology?
“Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network.” It is a technology that uses distributed database that is shared among the nodes of a computer network. Blockchain, as a database, stores information in a digital format.
To further define the technology, “it is a structure that stores transactional records, known as the block, of the public in several databases, known as the chain, in a network connected through peer-to-peer nodes.”
The transactions in this digital ledger are signed and authorized by the digital owners which proves its authentication and safeguards it from interference.
Features of Blockchain
Participating in online money transactions comes with its own risks. Blockchain technology’s main purpose is to provide a secure and safe environment, especially for MNCs and other organizations that need proper record keeping of data and transactions.
Blockchain technology can support various applications related to multiple industries such as finance, manufacturing, supply chain, and more. Some of the features of Blockchain technology that have promoted its popularity are-
- Secured- To conduct fraud-free transactions Blockchain uses the digital signature feature. As a result, it is not possible to tamper with or change the data of an individual by someone else without that particular digital signature.
- Not a centralized system- Blockchain is using an unconventional route of completing the transactions. Unlike what is the convention, that one needs the approval of a bank or government, or other regulatory authorities to complete the transaction, Blockchain completes the transactions with mutual consensus of the users. This helps in a smoother, safe, and faster transaction.
- Automation ability- Provided the criteria of the trigger are met, Blockchain is programmed to generate systematic actions, events, and payments automatically.
Working of the Blockchain Technology
Given the properties of Blockchain and its ability to provide a secure wall in carrying transactions and digital records, many organizations are integrating the technology. The working of the Blockchain technology is based on the following three technologies-
- Cryptographic Keys
- A shared ledger that is contained in a peer-to-peer network
- The ability of computing, to store transactions, and records of the network
A special mention about the cryptographic keys is-
- It consists of two keys- Public and Private keys
- These help in carrying successful transactions between two parties
- Each party has these two keys and they use it to produce a secure digital identity reference, and this is the most important aspect of Blockchain technology
- This identity that is generated with cryptographic keys is referred to as the ‘digital signature’ which is used for authorizing and controlling transactions
Types of Blockchain
In total there are four different types of Blockchain. They are-
1. Private Blockchain Networks-
This is mainly for private businesses and organizations as private blockchains operate on closed networks. This enables companies to customize their accessibility and authorization preferences, security options, and other parameters to the network.
2. Public Blockchain Networks-
Cryptocurrencies like Bitcoin were made from public blockchains. This also helped in popularizing distributed ledger technology (DLT). This also helps in eliminating certain challenges and issues like security flaws and centralization.
3. Permissioned Blockchain Networks-
This type is also known as hybrid blockchains. This blockchain network is private that permits special access to authorized individuals. Organizations use this network as it enables better structure while designating who can participate in what transactions.
4. Consortium Blockchains-
Much like the permissioned blockchains, these blockchains have both private and public components. Multiple organizations can work with a single consortium blockchain network. This can be a little complex to set up but offers better security and is optimal for collaboration with multiple organizations.
What are the pros and cons of Blockchain?
Given the discussion so far, one must have understood the benefits of Blockchain. But like any other form of technology, Blockchains have both advantages and disadvantages that organizations must know about before using Blockchain.
To look into the pros of blockchain-
- High level of security
- Protect and secure sensitive data in online transaction
- Provides speedy and convenient transactions
- No third-party interference of other institutions
To look into the cons of blockchain-
- In the use of Public and Private keys, there have been reports of problems with the private keys
- If one loses his/her private key, they will face a lot of challenges
- There is a limit on the number of transactions per node making it a lengthy process to complete multiple transactions and other tasks
- Difficult to change or add information once it is recorded
Companies must consider all of these pros and cons before deciding on the usage of Blockchain and further on which type of network to use.
Blockchain technology is witnessing its speedy acceptance and usage. These informative articles by Edureify aim to help students learn about the various technologies that go into the successful working of an organization. By knowing such things, students can pick up their area of interest, learn and study them, and build their careers accordingly.
Eudreify has also come up with articles on topics like JavaScript, SQL, Node.js, Bootstrap, and Web Development complete guide to help students learn more. For more such information and coding courses, stay tuned to Edureify.
Some FAQs on Blockchains-
1. What is Blockchain?
“Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network.” It is a technology that uses distributed database that is shared among the nodes of a computer network. Blockchain, as a database, stores information in a digital format.
2. What are the technologies used in Blockchain?
The different technologies used in Blockchain are-
- Cryptographic Keys
- A shared ledger that is contained in a peer-to-peer network
- The ability of computing, to store transactions, and records of the network
3. Mention the different features of Blockchain.
The different features of Blockchain are-
- Secured
- Not a centralized system
- Has automation ability
4. How many types of Blockchains are there?
There are four types of Blockchains. They are-
- Private Blockchain Networks
- Public Blockchain Networks
- Permissioned Blockchain Networks
- Consortium Blockchain Networks
5. From where can I get such informative articles on Blockchain and other technologies?
Edureify has hoards of information articles on technical tools and other coding software. One can read such articles on our website or download our app.
