BLOCKCHAIN- THE NEW AGE TECHNOLOGY
"Blockchain technology can change our world more than people imagine" – Jack Ma, Co-founder of Alibaba.
Blockchain! This word can be heard everywhere these days, but what is it?
Let's have an insight.
Introduction to Blockchain Technology
Blockchain is a promising and revolutionary technology. In simple words, it's a digital system of recording information in a way that makes it difficult or impossible to hack, change or cheat the system. Blockchain is ideal for providing accurate information stored on the immutable ledger that can be accessed by permission members only as it's a decentralized platform. For this reason, Cryptocurrency is monetized and organized by this technology.
History of Blockchain
Stuart Haber and W. Scott Stornetta, two research scientists, first discussed blockchain technology in 1991. They created a system that stores time-stamped documents via a cryptographically secure chain of blocks.
Merkle Trees was incorporated into the blockchain architecture in 1992, making it more efficient by allowing several documents to be aggregated into a single block.
Hal Finney, a computer scientist and cryptography activist proposed the Reusable Proof Of Work (RPoW) system as a prototype for digital payment in 2004.
Satoshi Nakamoto first proposed the notion of distributed blockchains in 2008. He enhances the architecture by adding blocks to the original chain without needing them to be signed by responsible parties in a new technique.
How does Blockchain work
Blockchain is a distributed database system shared among the nodes of a computer network. The main difference between standard databases and Blockchain is the data structure. Blockchain collects information together in groups, which are known as blocks. Each block in the chain contains several transactions, and every time a new transaction happens, a record of that transaction is added to every participant's ledger. In most normal databases, such as SQL databases, Data can be manipulated, altered, or deleted easily, but these actions can't be done on Blockchain, which is why it's called DLT(Distributed Ledger Technology). DLT is a protocol that enables the secure functionating of a decentralized digital database. As this is a decentralized technology, all transactions
Real-world Blockchain uses
Blockchain is the solution to many problems now, from Crypto-enthusiasts to top business minds. This technology remains a quickly growing area of growth for companies. It can help us in many ways, such as
● Cross-Border payments - Blockchain technology can provide a faster and cheaper alternative to traditional cross-border payments.
● Smart Contracts – Smart contracts are applications of Blockchain, which is futuristic because they are entirely self-executing and self-enforcing.
● Digital Voting – Voter fraud has always been a huge concern. Using this immutable nature of Blockchain, it'll be transparent voting, and if there are any changes to the network, regulators can notice that easily.
● Supply Chain Management - Blockchain increases the overall efficiency of SCM. It provides accurate information about a product (e.g., product quality, location), which helps prevent losses during production.
Security in Blockchain
Blockchain technology achieves decentralized security and trust in many ways. It is a type of DLT in which transactions are recorded with an immutable cryptographic signature called Hash. Hash codes are created by some mathematical functions that turn digital information into strings of letters and numbers.
Let's think a hacker is trying to hack. A 51% attack is known as a majority hack. When a person or a group gains 50% of a Blockchain's hashing power, A 51% Attack happens. But as the Blockchain grows and acquires new mining nodes, it makes the chances of a 51% Attack less likely because the cost of performing a 51% attack rises with the network hash rate. Due to the size of Cryptocurrency and how fast it is growing, the cost to pull off would be unassailable for a hacker, and the hacker has to expend a considerable amount of computing power to achieve a 51% attack. Even if the attacker can reach above 50% of the hash rate, the size of the Blockchain still can provide security because blocks are linked with each other in a chain. Overall, it'll not just be an expensive attempt but also fruitless.
Problems with Blockchain
Like we say, "Every good comes with some bad"
Just like that, there are some problems with this Blockchain also.
● Energy Consumption – This technology consumes way more energy than any centralized system
● Scalability – It's still a challenge for Blockchain to manage a large number of users. It requires enormous storage and a bigger Blockchain.
● Complex to understand and adopt – The complexity of algorithms in this technology is a drawback because everyone isn't aware of the principles of encryption and DLT.
● Regulation – Blockchain is a decentralized technology which means there are no moderators, no leaders, None. That's why it's an easy target for market manipulation.
Future of Blockchain
This technology remains a quickly growing area of growth for companies.
It's more than just a system for securely transferring cryptocurrencies. Besides finance, it also helps in voting, healthcare, artist royalties, and many other things.
Recently, the introduction of Blockchain to Web 3.0 has created a storm. Networks in the third generation of the Web exhibit interoperability, automation by holding smart contracts, seamless integration, and censorship-resistant peer-to-peer data files. Therefore, it's clear that Blockchain will be a driving force for Web 3.0.