What is Blockchain ? How does Blockchain Technology work?

What is Blockchain :If you do trading, then you must have heard about Blockchain technology, how it works, if you do not know, then in this article you will give complete information on which bitcoin works, bitcoin is a cryptocurrency and all the crypto currency It works on Blockchain and we call all these crypto Alt Coins today by using Blockchain very big companies have increased their business a lot.

And in the same way the importance of Blockchain is going to increase a lot for us, what is Blockchain you will know in this article? And where can it be used, how Blockchain can be important for us, so all the information will be given to you through this post and you must read this post completely.

What is Blockchain Technology?

Blockchain has a data base that works to collect information in its block. Now you will have this question in your mind, what is this data base, then let me tell you that the data base is a collection of many information which is stored electronically in the computer.

This is the biggest feature of the data base that many people can use it at once, the purpose of blockchain is to record digital information and easily reach the people.

But once the information that has been stored in the blockchain cannot be changed back and also due to the blockchain being decentralized, it is not under the control of any one person or organization, which makes it the most different and unique.

Whatever information is generally kept in the computer, it can be easily changed because it is under the control of an individual or organization. Due to which it becomes very easy to fraud.

The information once stored in the same blockchain cannot be changed again, due to which fraud in it is almost negligible. Blockchain collects the information in groups and has the ability to collect the information of each block. Due to which a very large chain of data is formed which we call Blockchain.

When did Blockchain Start

The famous cryptographer David Chaum proposed a protocol like Blockchain in the year 1984, which was carried forward by Stuart Haber and W. Scott Stornetta in the year 1991, they wanted to create such a system in which the information kept could not be tampered with.

In which he also succeeded, but at that time Blockchain Technology was much ahead of its time. Blockchain got its real identity after the year 2009 when a person or group named Satoshi Nakamoto discovered Bitcoin.

And Blockchain Technology was used in Bitcoin, and from then till today is the time where everyone is talking about Blockchain and it is being used in many places.

Types Of Blockchain Technology 

Blockchain Technology is mainly of 3 types Public Blockchain, Private Blockchain, Hybrid Blockchain, let us understand these four types.

1. Public Blockchain

As the name suggests, public means anyone can use this public blockchain. Bitcoin, Ethereum, Litecoin etc. are all public blockchains, in this, whatever information is gathered in the network, it is not stored in one place but stored in many computers, which we also call Nodes.

If you have a good internet connection then you can also become a part of the public blockchain, after which you will get all the records of whatever activity has happened in that network till now and you will also be able to do mining.

2. Private Blockchain

The way Public Blockchain is an Open Source Private Blockchain is the exact opposite of it, it is a Closed Source network that you have to get permission to use. Because it is controlled by a single party.

Therefore, only selected people can use this network, although Private Blockchain works like Public Blockchain but it works within a radius so that not everyone can use it.

It is used by the company or organization for voting, supply chain management or using digital identity. Hyperledger, Multichain, Ripple are examples of private blockchains.

3. Hybrid Blockchain

Hybrid Blockchain is made up of Public Blockchain and Private Blockchain. It uses both Private Permission and Public Permissionless systems. With the help of which any organization can decide which information should be kept public and which information should be kept private.

Generally, whatever records and transactions happen in Hybrid Blockchain are not made public but they can be verified in Public Blockchain. Dragonchain is an example of Hyrbrid Blockchain.

How does Blockchain Technology work?

The three most important parts of Blockchain are Blocks, Miners and Nodes, let's know about these three in detail.

Block

As you know Blockchain is made up of many blocks in which data is collected, each block has a different hash number which is associated with the previous block and this hash is created when there is a transaction. is.

If someone tries to tamper with these blocks, then these hash numbers get changed, so that it can be easily known that someone has tampered with the block.

Miners

Miner has a very important role in Blockchain because it is the miner who makes new blocks by mining. For example, whenever there is a transaction / transaction in bitcoin or any cryptocurrency, the information about that transaction first goes to the miner.

The miner verifies this information, now for this the miner has to extract the information of whatever transaction data is in that block, which is like a mathematical puzzle which is solved only with the help of computer.

But it is not as easy as it sounds or looks, after extracting the information of the block, the miner gives it a hash number which is different for all the blocks.

And the hash number of each block is associated with the previous block, for example let's take two blocks Block A and Block B. Now to verify Block A the miner has to first extract its transaction details and after that the miner will give him a hash will give the number which we consider as hash A.

Now in the same way, the miner extracts the transaction details of Block B and assigns it hash number to hash B. Now this hash B will be composed of the earlier hash A i.e. hash B + hash A.

Now whatever transaction will happen next will be associated with hash B, if hacker attacks hash A and tries to change that hash number then hash B will also change with him because it is linked to hash A and so on. All blocks ahead of it will also change.

Due to which it will be very difficult for the hacker to attack the blockchain because he will have to hack all the blocks at once and to do all this he will need a much more powerful computer which is almost impossible.

Nodes

The biggest feature of Blockchain Technology is Decentralization, that is, it is not controlled by any one person or organization. Blockchain is like a book of accounts that stores all kinds of information.

Nodes are maintained in this account book, which are computers in a way that keep the entire network connected. There are many similar nodes in the blockchain and each node has a copy of the blockchain.

Nodes verify whatever transaction or whatever activity happens in the network and update it in the network, if they feel that some kind of wrong activity or transaction has happened, then all the nodes together cancel it.

Advantages & Disadvantages Of Blockchain Technology

Blockchain Technology Advantages

Security

In this, whatever activity happens from the transaction, it is present in the public, all the nodes in it, their eyes are on every single activity and as soon as there is some change in it, they get to know immediately. Blockchain Technology is an open source platform. Due to which it becomes almost impossible to fraud in it,

Traceability

Whatever activity happens in this, it can be traced very easily, like at what time any transaction took place, how much amount of transaction took place, all these can be easily traced.

Fast Process

The banks that are there, they take a lot of time to do any transaction, for example, if we want to send money from India to America, then it takes many hours and days, but with the help of blockchain technology, it takes few minutes. It happens very fast, where in the bank we have to pay a lot of fees to do this transaction, the same fee has to be paid almost negligibly in the blockchain, so this is a big advantage.

No 3rd Party

Where Rupees, Dollars, Euros are under the control of the government, cryptocurrencies are not under anyone's control due to Blockchain technology. Being Decentralized, Blockchain does not require any 3rd party,

Now let's talk about its disadvantages, see the disadvantages of blockchain.

Disadvantages of Blockchain Technology

Cost

You know that using blockchain technology is very expensive, if we use it, then you have to pay network fees to use it, which is very high.

Although there are many blockchain platforms that have found a solution, the problem still persists in the big cryptocurrencies such as bitcoin and ethereum.

Scalability

As more and more people use blockchain, its problem will increase and it will not be able to do transactions and other activities as fast. And Ethereum is also facing the same problem.

And to address this, Ethereum is now upgrading itself to Ethereum 2.0, and its co-founder Vitalik Buterin says this will greatly increase the speed of Ethereum.

High Power

There are still many blockchain platforms that use a large amount of electricity, and the biggest example of this is the world's most famous cryptocurrency, Bitcoin, which works on Proof of Work.

Bitcoin uses more electricity in a year than countries like UAE, Netherland do not use electricity in a year, which is a matter of great concern.

Immutable

Once the data goes into the blockchain, it cannot be changed back, let's say you have 10 bitcoins, out of which you want to sell 5 bitcoins, which are worth crores, but you send them to a wrong address and by mistake You send 10 bitcoins instead of one.

So once this transaction is done it cannot be refunded. That is, to say clearly, now you have lost all your bitcoins, forget them.

Here you cannot even complain to anyone, because it is a decentralized system, no one controls it, so there will be no one here to listen to your complaint. And this is its biggest disadvantage.

Real world use of Blockchain technology

Apart from Cryptocurrencies, Blockchain Technology can be used in many places. There was a time when blockchain was used only in crypto and today it is being used in the real world. By using this we can save our time and a lot of money.

Financial Services

There was a time when Blockchain technology was called fraud, even Wikipedia itself deleted the article related to blockchain around the year 2010-11, but today Wikipedia takes payment in bitcoin.

Well-known big banks around the world like JP Morgan, Citi Bank, Morgan Stanley are using blockchain technology.

So that faster transactions can be done and time can be saved, similarly many banks in India have started using Blockchain technology. Where at one time he was strongly against blockchain, today he is using it.

Smart Contract

There was a time when people used to contract in a simple way and the opposite party agreed by signing on that contract but there was a lot of possibility of fraud in it.

But since the advent of blockchain technology, it has made contracting a lot easier. Smart Contract is a computer program in which all types of contracts, agreements, terms and conditions are made with the help of coding.

You can also call it a digital contract, which can be between two or more parties. Which is made with the help of coding, these smart contracts are automatically run and controlled with the help of Blockchain technology.

The main purpose of the smart contract is to remove the third party from the middle, once the smart contract is created, no one is required to run it, according to the terms and conditions, the smart contract continues to run according to the code that will be created. .

NFT

If you know even a little bit about cryptocurrencies, then you must have heard the name of NFT many times.

The full meaning of NFT is Non Fungible Token, it can be an Art, Video Game, Music, Text, GIF, anything that is different and most different, NFT tells your Ownership that you can use this particular Art, Music, Video etc. is the owner of.

NFTs are stored in the blockchain, which makes it much easier to track.

You can make and sell your NFTs on NFT platforms like Opensea, Rarible, Binance Smart Chain and if someone buys your NFT and sells it to someone else, then you get some percentage of money on it.

Supply Chain

Blockchain technology is helping businesses a lot, if the business owner is aware that he has complete information about the goods used in his business from the time it is made to reach the customer, then that information can help him a lot. .

At which place, what is the problem and why is it coming, due to which there will be transparency and the possibility of fraud or something wrong in the middle will be greatly reduced. And big retail companies like Walmart are using it.

Healthcare

Blockchain technology can be used very well in healthcare, the hospital can save the information of its employees, doctors and patients etc. on the blockchain. And when you want to use it, you can use it again through Private Key.

With this, whatever information is on the blockchain will be protected and confidential. And no one can change that data.

This is just a small glimpse, in the same way Blockchain Technology can be used in many places. If I go to tell you then this whole article will fall short.

Conclusion

Friends, in this post we have told you What is Blockchain? It has been told about what are its advantages and disadvantages also, what will be its effect on real life, share all the information with you, if you have any question or suggestion, definitely tell us by commenting and share this post with your friends.

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