A Beginner’s Guide In Understanding Blockchain Technology And Beyond

If you mention the term blockchain to someone largely aware of the happenings in the world, the first query or comment will be about cryptocurrency. As the definition suggests, blockchain is basically a digitized, decentralized, public record of all cryptocurrency transactions happening in the world. The problem is, getting a grasp of such a huge concept can be quite tough, hence simpler explanations are required.

A Little History – It was first developed as an accounting method and tool for the highly controversial cryptocurrency known as Bitcoin. This tool uses DLT or distributed ledger technology where completed blocks i.e. the most recent transactions are recorded in a chronological order. The best part is, blockchain allows market participants to keep track of all the transactions in digital currency without any central record keeping system. Each node, which is basically a computer connected to the network receives a copy of the blockchain and downloads is automatically.

The Influence – Despite the initial usage, today blockchain technology is being used in an array of different areas and commercial applications. Apart from verifying transactions of digital currencies, it is being used for digitizing, coding and inserting any document within the setup. This way, an indelible record is created of the document or transaction which then cannot be changed. Moreover, the authenticity of the said document can be easily verified by the entire community of blockchain users instead of any central authority.

The Transactions – In the blockchain setup, in a validated transaction, one person pays another person for goods or services. This way, the need for a third-party for the processing of the payment gets eliminated completely. The best part is, under the protocol, each node or connected computer participating in the system, receives a copy of the blockchain that is basically the record and proof of all the transactions ever executed through and within the structure. Due to this, it is quite possible to find out the value of a particular address at any point in time.

To make things easier to understand, it can be said that the blockchain is like the complete history of all the transactions of a financial institution and each of the blocks can be considered as an individual statement of the transactions happened. Due to its distributed database and open nature, blockchain has simplified businesses for all the participating parties. So, far along with various financial institutions, stock exchanges, other areas such as music, insurance, diamonds, IOT or internet of things are using the blockchain technology with the future open for areas such voting, vehicle and weapon registration, medical records and so on.