BLOCK CHAIN TECHNOLOGIES Introduction

BLOCK CHAIN TECHNOLOGIES Introduction

Blockchain:

Blockchain is a digital ledger maintained and distributed among multiple interconnected computers called “nodes.”
The blockchain is made up of consecutive “blocks” that store an accounting of relevant information, such as transaction time, amount and addresses involved in transactions.
Each data set is linked to the one before it using a cryptographic algorithm to verify and create a time-stamped hash of the data.
Copies of the blockchain are then distributed to the users within the network with access to view the stored information.
Through this technology, Bitcoin and other digital currencies maintain privacy and security while having a public, decentralized ledger.
With the introduction of Bitcoin in 2009, the world was introduced to blockchain technology.
This would become the first of many steps in the shift towards digital currencies.

Privacy and Security of Blockchain:

The security of a blockchain relies on two aspects: the structure of the blocks and the peer-to-peer network that maintains it.
In the blockchain, each new block is added to the chain in a linear and chronological order.
With each block linked to the previous one, any bad actors wanting to tamper with data would need to decrypt previous blocks before reaching their targeted data and rewriting the chain forward from the chain while convincing all other nodes to do the same.
This becomes increasingly infeasible in cost with every block of data added to the blockchain, so the security of a blockchain is two-fold: tampering with data is technologically difficult and economically impractical.
In addition, copies of the blockchain are held by many other users within the blockchain network.
To successfully alter data on one block, the hundreds and thousands of copies of that block must be changed as well, which adds a third component of subversive human cooperation and planning in order to subvert the whole network.
Malicious changes to the ledger are therefore practically impossible.

Differences Between Blockchain and Bitcoin:

Blockchain is a generic term for the technology that Bitcoin and other digital currencies use to secure and record their transactions.
Each transaction’s data is organized into a block, marked with a timestamp, and then hashed with an encryption algorithm.
The resulting blocks are then chained together and arranged chronologically, with each new block carrying a list of the previous block’s confirmed data.
Each operating member of the blockchain network maintains a constantly-updated copy of the blockchain data for the client users of the network.
Bitcoin, is a specific digital currency that applies blockchain technology.
It is only available electronically and is not reliant on banks and other institutions to regulate or distribute.
Utilizing blockchain technology, Bitcoin can enable peer-to-peer transactions without a middleman or governing authority while maintaining user security and nearly eliminating the risk of fraud or theft.

Uses of Blockchain:

Aside from its use in digital currency, blockchain technology has seen other useful applications in other industries.
Given the way blockchain security works, it can be used as a notary timestamping tool for regulatory compliance and auditing.
Using a global, public ledger decreases the risk of human error, and allows organizations to strengthen the integrity of their records because once the data is entered into the blockchain, it is much more difficult to alter than if it was stored in a centralized, private database.
In the insurance industry or other industries where the value and integrity of data is crucial, a blockchain can deploy smart contracts to automatically execute agreed-upon terms between two parties.
This reduces the opportunity for technical and human errors in the management of financial transactions that require specific triggers before executing.
Smart contracts increase efficiency, and they also eliminate the risk of failure to properly distribute funds based on the rules of the contract.
Blockchain also has multiple uses in supply chain management and other event-based business operations.

Breaking Down the Blockchain Process:

The basics of how blockchain works are relatively simple.
A vital part of this process is the peer-to-peer network that facilitates the creation and maintenance of the blockchain.

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