Are you confused about this new technology called blockchain? Do you spend hours wondering how is this chain created and why is it called blockchain technology? Why is it so special? What all industries are using it or can use it?

If the answers to any of the above questions is yes, then worry not and keep reading.

We will start with what is blockchain? And why is it making waves in the world of technology.

Let’s start with the definitions of blockchain for both layman and technocrats.

In layman’s language – Blockchain is nothing but an ever-growing secure, shared record-keeping system in which each user of the data holds a copy of the records, which can only be updated if all parties involved in a transaction agree to update.

Now let’s see what the same thing means in technical language –

Technical definition: Blockchain in technical terms is a peer-to-peer, distributed ledger that is cryptographically secure, append-only, immutable and updateable only via consensus among peers.

Too technical for you to understand? Worry not – it means the same thing as defined in layman language, but since it is for technocrats it has more technical terms. If you are still confused, then consider this – Blockchain can be thought of as a layer of a distributed peer-to-peer network running on top of the internet.

With this explanation, hope you are clear about what is blockchain. If still not clear consider it as a digital diary entry, which has an access to a trusted few.

Understanding Blockchain Technology

Okay now that you are clear about what is blockchain let’s understand what are the general elements of blockchain technology. Why because only when you will know about the general elements of  blockchain technology, you will be able to understand blockchain technology and how it works –

So here it goes – you know that each block in a blockchain network stores some information along with the hash of its previous block. But wait, what is hash? A hash is nothing but a unique mathematical code that belongs to a specific block. So how does that work? Here’s how – so if there is some modification on the block, then the hash will also be modified. However, the connection of each block through this unique hash key is what makes a blockchain so secure. 

  1. Address: refers to the hash key of the receiver as well as the sender.
  2. Transaction: the exchange that takes place between the sender and the receiver.
  3. Block: the spreadsheet that is created with a unique hash key
  4. Peer-to-peer network: refers to the network that is shared with the trusted few.
  5. Scripting or programing language: refers to the language or the script used to write codes on a block connecting it to the other blocks in the blockchain network.

It is quite interesting to know that Blockchain technologies were initially known as geek money. It was first introduced as ledger to record the transaction of cryptocurrency Bitcoin. However, over the years, Blockchain technologies have found its way into numerous industries because of some of the unique properties that are now being counted as benefits of adopting blockchain technologies.

  1. Decentralization
  2. Transparency and trust
  3. Immutability (extremely difficult to change)
  4. High availability
  5. Highly secure
  6. Simplification of current paradigms
  7. Faster dealings
  8. Cost saving

As stated earlier, these are not just the properties anymore but have become the advantages of blockchain technologies. Decentralization and immutability are the most prized benefits of blockchain technology along with it being cost saving and faster dealings.

We hope that you now understand what is blockchain technology and how it works. To have a better understanding you can search on the internet.