Monday, June 24, 2024

What is Blockchain Technology?

f you are a little bit interested in cryptocurrencies such as Bitcoin, Ethereum, Dogecoin etc. then you must have heard about Blockchain as well. Because these two are related to each other. Many people assume bitcoin and blockchain to be the same, but it is not so. Because bitcoin is a kind of digital currency and the technology through which it works is called blockchain technology.

All the digital currencies of today work through this technology because blockchain is a platform where the transaction account of all these cryptocurrencies is kept in a digital way in a secure way, which can never be changed. Can never be hacked. 

In today’s time Blockchain Blockchain technology is considered to be a very revolutionary technology. Because its use is not limited to cryptocurrencies, but it is also being used in many different fields such as financial, educational, manufacturing etc. That’s why all the big banks, companies, governments of the world are showing interest on it and are also working on it. 

Just as we have been seeing the World Wide Web as the Internet of Information for many decades   (ie, considering it as a source of information or information), similarly now we are entering an era or time where people can use Blockchain technology on the Internet . of Trust and Internet of Value .

So let’s understand about it in detail and easy way, what is blockchain and how does blockchain technology work. Its advantages and disadvantages are also known one by one.

What are Blockchain Technologies – Blockchain taknik kya hai

Blockchain means a kind of Digital Ledger i.e. digital ledger. Where a permanent account or record of transactions of digital currencies such as Bitcoin is kept, which is completely secure and irreversible.

Blockchain Technology

Just as a shopkeeper keeps all the transactions happening in his shop in his account page after page, in the same way, the account or record of the transaction is kept in the block in the blockchain as well. Where many transactions are kept in each block, which are linked one after the other and a long chain of blocks ie chain, which is called blockchain.

Each block of the blockchain must contain these four things such as the hash pointer of the previous block , the timestamp , a list of transactions and the hash pointer of that block. And all these blocks live in the network of blockchain in a secure way with the help of cryptographic algorithm .

The longer the blockchain becomes ( meaning the more people join the blockchain system, the more transactions will happen and the more transactions happen, the more new blocks will be created ) the more secure it will become so that it can be hacked, change the data of the transaction or any other thing. It is also not possible to remove or reverse the block. So that this technology works more securely and transparently.

Blockchain technology is also known as Distributed ledger technology (DLT) . Because its decentralized ie decentralized database is operated by many computers located in its network, which are called nodes .

There are many such nodes in the system of blockchain. When a transaction takes place, its information goes to all the computers ie nodes located in the network of the blockchain. And when this transaction is approved by those nodes then that transaction is recorded and kept in the digital ledger.  

When and who started blockchain technology

In 2008 , an individual or an organization named Satoshi Nakamoto released a whitepaper called ” Bitcoin: A Peer to Peer Electronic Cash System “. In which a payment system was described with technical details, which would allow individuals to transact without involving any third party i.e. intermediary financial institution. And thus in 2009 Bitcoin was publicly launched and the technology by which it was operated was called Blockchain technology.

The most important thing is that till now no one has come to know about Satoshi Nakamoto. But with the help of this technology as told by him, many cryptocurrencies are working decentralized i.e. decentralized and peer -to-peer. And there is no doubt that in the coming times this technology will be used in cryptocurrencies as well as in many other places.

How does Blockchain technology work? How Blockchain Technology Works

  • Blockchain technology is mainly a combination of three different technologies viz.
  • Cryptographic keys – Public key and Private key
  • A Distributed peer-to-peer network
  • Blockchain Protocol or Programme

All the transactions that happen in the blockchain have to go through many steps before being added to the blockchain. So without delay, let’s know and understand in detail about all those steps, how blockchain works and how transactions are done in it. 

Step-1 When two people want to transact with each other, then they need cryptographic keys , which are of two types, one is public key and the other is private key . Every person has both his own key i.e. key and with the help of which that person gets a secure digital identity.

In the world of cryptocurrency, this digital identity is known as digital signature and is used to authorize and control transactions.

Step-2 When both those persons agree to the transaction then a block is formed representing this transaction and it is authorized or approved before adding that block to the chain. are done.

Step-3 Because the blockchain works in a decentralized manner, then the work of authorizing it is done by the computers located in the network i.e. nodes and with the consensus of the nodes . Consensus means that most of the nodes have to agree that the transactions between these two persons are valid.

The people (or miners ) who work (or miners ) to verify or verify this transaction through these nodes or computers , those people are encouraged to do this work and as a result they will get Some cryptocurrencies are given. Because for this they have to solve a complex mathematical problem within a lot of work time and for which they need many powerful computers and whose computing power is also high.

The people or miners who solve this task i.e. complex mathematical problem first and find a correct Hash for that block and validate that transaction, they get some Cryptocurrency as a reward. And this whole process or validation process is called Proof of Work .

Step-4 After validating the transaction, that block is added to the existing blockchain, which becomes completely immutable and immutable ( unaltrrable ). After this it is updated in the blockchain key network and that is how the transaction between two persons is completed.

This is how blockchain technology works. Some of the terms mentioned in it like Public key, Private key, Hash etc. have been mentioned in the FAQ section below.

Types of Blockchain | Types of Blockchain Technology

There are three main types of blockchain

1- Public blockchain – It is a type of open source, distributed and decentralized public blockchain ie ledger. Which has no controller or charge. This means, anyone can read, write and audit or review this blockchain. That’s why it is considered a permissionless blockchain. 

A simple example of a public blockchain are cryptocurrencies such as Bitcoin. Because it is a public network. In which anyone can join and can also see, read and track all the bitcoin transactions done here.

Example – Bitcoin, Ethereum cryptocurrency works like a public blockchain.

2 – Private blockchain – It is like a type of private asset, which is controlled by an individual or an organization and it is ensured by them that who can see, read and transact in it and consensus process (consensus process) can participate. That’s why it is considered a permissioned blockchain.

Example – Blockstack cryptocurrency works like a private blockchain

3 – Consortium or Federated blockchain – It is considered as a type of semi-decentralized blockchain. Because it is not like public and private blockchain, which is controlled by all or one person, but it is controlled by approved persons. Because for the best benefit of the entire network, the burden of all decisions and consensus process rests on them. Therefore a blockchain controlled by a group is called a consortium or federated blockchain.

Example – Ripple works like a cryptocurrency consortium or federated blockchain.

Advantages of Blockchain Technology | Advantages of Blockchain Technology

Blockchain technology is so much discussed because it has some special things like 

Enhanced Security and Immutability – Cryptographic algorithms are used in the blockchain, so that the data located in the block can never be changed. Because the data of the blockchain does not reside in any server but resides in nodes which are a network of many computers. Therefore it is impossible to hack it or tamper with the data.

Internal Link – scienzlife

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