Blockchain technology can be briefly defined as a “distributed and decentralized public ledger”. This is believed by many to be something that could bring transformation in many industries.
Blockchain is a wide database that is maintained by the public community, rather than with a single server like the government or the bank. Each “block” represents a number of transactional records, and the “chain” component links them all together with a hash function. As records are created, they are confirmed by a distributed network of computers and paired up with the previous entry in the chain, thereby creating a chain of blocks, or a blockchain. And since the data is not under the control of a single authority, it cannot be manipulated/ history erased like the standard, centralized database of information.
Blocks store information about transactions, like the date, time, and dollar amount of a purchase made online. They also contain data about the participants of the transactions. Also, the information that is stored in the block is distinguished them from other blocks.
How does it work?
After a transaction occurs, it will be verified. A wide network of computers then checks the transaction and confirms the details of the purchase, including the transaction’s time, dollar amount, and participants. After it has been verified, the information is stored in a block. It will also be given a hash- a unique, identifying hash. The block is also given the hash of the most recent block added to the blockchain. Once hashed, the block can be added to the blockchain. It is then available for the public view.
What are the gaps?
While this technology has a lot of potential, there are still some hurdles that it needs to surpass. One is its enormous power requirement. Power demanded by a blockchain network is similar to the demand of a small country, in its present state. Another issue is the transaction time taken. At its worst, bitcoin’s average transaction time exceeded 41 hours. Ethereum is much more efficient, but its average time is around 15 seconds — which is quite long for a normal transaction.
Where is Blockchain used today?
Even though cryptocurrency and bitcoin are the well-known uses of Blockchain technology, it is not the only uses. There are many other practical applications that are revolutionizing many industries. In the field of entertainment, Spotify has acquired blockchain startup Mediachain Labs to help develop solutions via a decentralized database to better connect artists and licensing agreements with the tracks on Spotify’s service. Bitcar is a fractionalized ownership of collector cars made possible by a BitCar token.
IBM uses blockchain to know the status and condition of products on the supply chain- from raw materials to distribution. Blockchain for supply chains allows transparency with a shared record of ownership and location of parts and products in real time. Blockchain technology is used to facilitate the storage and utilization of electronic health records in order to deliver a complete telemedicine experience. One of the first healthcare company to do this was MedicalChain.
Other industries that use the technology to become more efficient are insurance, retail, real estate, social engagements, charity and financial services. Popular author Bernard Marr writes that many of these applications are potentially disruptive and that it will be interesting to watch how many of these will survive this initial hype phase.
This blog was written by our Content Writing Intern – Rona Sara George. Click on the name to view her LinkedIn profile.
Author: Xaltius (Rona Sara George)
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