Blockchain Technology Explained

15 Dec 2021

Blockchain is a kind of ledger technology that records and stores data. Blockchain is a buzzword present in every conversation about the future of technology, from new forms of cybersecurity to the power of crypto. The applications for blockchain technology are endless, although not many people know enough about it. 

In the world of traditional finance, transactions were recorded in written ledgers and stored in financial institutions. Standard ledgers are viewed and audited only by people with privileged access. Blockchain democratized these concepts by making transactions transparent yet private.

In its most basic form, a blockchain is a distributed list of transactions that are reviewed and updated all the time. It is also known as distributed ledger technology that is designed to track and record everything of value across a network. This is a kind of worldwide web of connected computers. 

Blockchain technology is often associated with crypto, but it is not exclusive to this market. It has a unique ability to add and store information, so it can be used across a wide range of industries. 

What does a blockchain appear as?

There are two main components to a blockchain: the block and the chain. 

A block represents a collection of data connected chronologically to other blocks in a virtual chain. In simple terms, a blockchain can be described as a train that consists of numerous carriages in one line, and each carriage contains data. Similar to passengers in real-life, blocks can fit only a certain amount of information before they are full. Each block has a timestamp, so it is visible when the data is recorded and stored. 

How is data added to a blockchain?

Besides data transparency, blockchain guarantees the security of data. If we use Bitcoin as an example, here is how a transaction becomes a part of a new block. If a user of Bitcoin sends a transaction, the message is recorded with the receiver’s and the sender’s public addresses in addition to the transacted amount. When the sender adds their private key to the mix, a hash is created. This results in a digital signature that confirms the transaction. After that, the sender packages this digital signature with the information and their own public key to broadcast to the network. This transaction is added to a waiting room with other unconfirmed transactions that are to be added to the blockchain. 

Blockchain technology use cases

The blockchain eliminates the necessity for such intermediaries as banks. The peer-to-peer network cuts out the middleman and facilitates secure inexpensive transactions that anyone can view. Blockchain technology is primarily used for finances, although there are many other functions. Some hospitals integrate the blockchain to track medical records and enhance their accuracy. Also, it has become possible to authenticate, trade, and sell digital art with the blockchain. 

Ultimately, blockchains have become an important part of how we live, work and interact with the internet. The crypto world is dynamic, so its overall impact is to be discovered. However, it is here to stay, no doubt. If you have any blockchain-related projects in mind, feel free to contact us and we will be happy to provide you our blockchain marketing services.

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