Possibly one of the most popular terms in technology we hear these days is Blockchain Technology. However, most of us are still uncertain about what this implies or how it operates.
So, what exactly is blockchain technology?
To put it in simple terms, let’s first split the word as ‘block’ and ‘chain’, which gives an idea that blockchain could possibly be a chain of blocks. Absolutely! This is what blockchain technology means in literal terms.
If we were to dig into this concept for a better understanding, a blockchain could be looked at as a list of records that are linked using cryptography. Cryptography is the process of analysing and practising new techniques to secure communication in the presence of a third party.
During the current times or in the years to come, where we have or will have completely shifted to an online platform, blockchain technology could do wonders when it comes to security. It will provide us with an option where information can be transferred from one party to another in a completely automated yet safe manner.
The critical question here is, how exactly does blockchain work?
Blockchain primarily is a decentralised and distributed digital ledger that consists of records known as blocks. These blocks contain the records of transactions across several computers. This way of retaining information ensures that no block involved can be altered without altering all the subsequent blocks. Furthermore, this permits the participants to verify and audit the transactions individually.
Taking a closer look at a block, it has mainly three parts:
Every block in a blockchain can store any category of data and will also have a hash that can be compared to a fingerprint, which means that each block will have a unique hash that makes it difficult to tamper with it.
The hash of the previous block helps to create the chain. However, since the very first block cannot have a hash of the previous block, it is called the Genesis block. If, one of the blocks have been tampered with, the hash of the block changes which means that the hash of the previous block on the next block does not match the hash of the preceding block.
However, hashes alone do not assure utmost security as the recalculation of hashes is pretty much possible. In order to mitigate this, there is something called proof-of-work which helps to make it more secure.
Clearly, blockchain is an emerging technology; hence it’s future is not entirely predictable. Recent studies have shown that employers expect to have a positive impact from blockchain in their industry.
In my opinion, blockchain technology looks like it would make a significant impact as it has the potential to revolutionize the industry.