Nowadays all
about technology. With the increasing need for modernization in our day-to-day
lives, people are open to accepting new technologies. Modern technology has
delivered space in our regular lives. Technologies like augmented reality and
Internet of Things that become gained a place in the past decade and now
there’s a new addition to the pack i.e. Blockchain Technology.
What is Blockchain?
Blockchain is
a digital and decentralized public ledger with a system that records
transactions across several computers linked to a peer-to-peer network. It was
basically developed for cryptocurrency assets like Bitcoin and Ethereum, but in
recent years more opportunities have presented themselves. In its most basic
form, a Blockchain is simply a decentralized ledger that is validated and
secured by a network of peer to peer nodes. This model has a lot of benefits as
it is resistant to censorship because of being decentralized. Let’s take a look
at the most critical component of blockchains.
1. Decentralization
Decentralization
is one of the most critical elements of Blockchain Technology which is the
cause of all their benefits like suspicious, restriction resistance, and
immutability. At its core, Blockchains have enabled people to come up with
systems that do not rely on a centralized third party to keep money safe. Due
to the decentralized nature of blockchains, no primary database can be taken
down by a government or terrorist outfit for individual gain.
Evidence of
Work, the most famous accord mechanism that is currently utilized to
synchronize millions of decentralized nodes relies on computing power to
resolve complex mathematical puzzles. This ensures that funds are always safe
and prevents any arbitrary dilution of the money supply.
2. Immutability
Central
tenets of a cryptocurrency are to prevent dual spends. This requires that none
of the previous entries in the ledger could be modified in any way. Blockchains
are especially useful in a scenario such as this because changing previous
ledger entries requires an attacker to have more computing power than the
entire network of miners protecting the network, which is referred to as a 52%
attack. This is not in the self-interest of the attacker as this attack
requires an enormous amount of capital to deploy and is therefore not likely to
occur.
Immutability
is of immense usefulness to several industries. Particularly, identity
verification and land deeds. Throughout history, dictators have nullified
previously agreed upon land titles and acts for personal gain. With Blockchain,
such takeovers and rewritings of history convert into difficult as there is a
publically accessible ledger that ensures owners their rights. Having one’s
identity encrypted and stored on the blockchain ensures that only people with
proper authorization could access that information reducing the risk of
identity theft.
3. Trustless
Blockchain’s
most important appeal reasonably lies in the fact that it is decentralized.
That is to say that there is no third party that users have to rely on in order
to keep their funds safe. The decentralized peer to peer network of miners
protects the network by what’s called Proof of Work, thereby eliminating the
need to trust any middlemen. The complete Blockchain code is open source and is
accessible for anyone in the world to examine, so eliminating any possibilities
of backdoors being built into the system. This ensures that individuals could
become their own banks and have much more say in how their money is used as
opposed to trusting a bank to keep their money safe.
4. Quicker, Cheaper Proceedings
Despite
Bitcoin’s network congestion delays right now, Blockchains are one of the
fastest ways to transfer value across the globe. This is in large part due to
the fact there is no intermediary to settle disputes in case of Bitcoin. Every
transaction on the Bitcoin blockchain is final and irreversible. This makes
Bitcoin operates similarly to how cash transactions work where payments are
final and irrevocable. Banks have to deal with lots of customer related issues
in order to ensure smooth functioning. But this additional service costs money
which is passed down to the consumers resulting in high transfer and withdrawal
fees for customers.
Conclusion
Blockchains
have seen endless attention both from the media and personal investors in
nowadays due to the sudden price rise that some cryptocurrencies have
observed. Because of the cost hike, coverage of blockchain technology has
marked too much concentrate on the transactional features of blockchain while
viewing other useful components of blockchains.
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Nice reading, This is an informative information, thanks for sharing this blog. Blockchain Development Services is one of the emerging technologies which helps you transfer you data safely without any change.
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