How will Blockchain change our future
Jun 24, 2017 Posted / 3336 Views
The blockchain is an area of the economy which has got a long way to go and has the far-reaching potential for that. It is a very direct technique which can just revolutionize the economy of the whole world. Let's first see what is a block chain.
The blockchain is an open decentralized database created by the combination of cryptography and math for every transaction involving value, ie money, property or even work. It creates a digital ledger of transactions that every node on the network can see. The network is basically a set of computers being connected to the internet in which all the computers should give their approval for the transaction to take place. So anyone who has access to the internet can do these transactions so that trusted third party organizations no longer serve any purpose in the task. Its potential applications can be found in all the fields. Cryptocurrency like Bitcoin, Ethereum, etc is the medium of exchange created and stored electronically in a block chain, using encryption techniques to provide security during transactions and to verify the transfer funds.
In the past, most of the people were not aware of it and some thought the technique won't be that efficient. Now seeing the true potentials of Blockchain technology with its transparency, security, and removal of third parties, it's getting the recognition from all over the world all of a sudden.
Blockchain technology is effective and secure at the same time. The transactions in a blockchain are not controlled by a central authority like a bank, but it's validated by all the nodes or databases in the network. The main advantage of this is the transactions are transparent and is secure. Technically it is said that no one in a blockchain can be fraudulent. Encryption is one concept that is not included in the blockchain system. But we can still add encryption techniques such as digital signatures to verify the identity of a particular person, thereby making the system more secure. The real identity of a person working on a blockchain can also be secured. For example in bitcoin transactions, there is no way of knowing the real address of the person who transfers the money, but it is done using specific codes.
When we give our credit card to a merchant, we are giving our complete details to him, irrespective of the amount we pay with the credit card. Credit cards work on a pull basis where the customer's complete details will be taken. Whereas the blockchain using the cryptocurrencies operate on a push basis which allows the transactions to be easier and faster. Also, the misuse of our identity can be avoided.
The blockchain technology uses a system of decentralized networks. This allows the blockchain to be used and handled by a network of users. Therefore there will not be any central nodes of failure. Blockchain can build a more durable solution or the probability of failure in the system is much less.
If we are using credit or debit cards or writing cheques for the transaction of money, since it needs the approval of the centralized organization involved, it may take even hours or days for a transaction to be complete. Here is where the real advantage of blockchain technology comes into play. In the transactions using cryptocurrencies, there is no centralized system for the approval of a transaction, the reconciliation of money can happen immediately which helps in increasing the speed of transaction drastically.
The transactions using the cryptocurrency does not need any fees as of now. When bitcoins are exchanged there are no transaction fees. But when more and more users indulge in digital coin transactions, they will rely upon third party services like Coinbase which acts as a platform for the exchange of currency between sender and receiver. It is equivalent to platforms like Paypal. They will charge a transaction fee but it will be much less than ordinary transactions.
There is only one common ledger for storing all the records of all the transactions that are happening in a large network. Every node in the network will be having this irreversible record. Since there are no third parties involved in the process, it can be so simple and effortless.
If we are using a blockchain transaction, we will be knowing everything about a particular block whenever a transaction involving that block occurs. Some of the details it includes are the number of transactions involved in a single block, the approximate volume of that block, transaction fees involved, the node that is relying on the block, the size if block and how much time is taken for reviewing the transaction.
We will be getting extremely detailed information if we have a bit of additional technical expertise.
Blockchain technology is considered to be a direct solution. Whoever involved in the blockchain will be knowing everything about their involved chain and about all other transactions.They can alter the chains very easily without the process of validation by a central node or authority.
If we want to pay for something on the Internet, we usually use a credit or debit card. That card is connected to information about us, such as our name and billing address. We can use cryptocurrency the same way in blockchain technology, but unlike with a credit card, the transactions we make with the currency are completely anonymous. There is no way to identify us personally using these transactions. Instead, whenever you trade in bitcoin, you use a private key associated with your wallet to generate a bit of code, more specifically an address that is then publicly associated with your transaction but with no personal identifying information. In that way, every transaction is recorded and securely signed in an open ledger that is the block chain, that anyone in the network can read and double-check.
The very important feature of blockchain is the encryption technique that is used - digital signatures. Whenever we carry out a transaction, the cryptocurrency will be sent with a code which looks like random. Only if we know the correct encryption key for it, we can receive the money. This way, it makes the blockchain transactions more secure.
The transaction using blockchain is irreversible. After confirmation, no one can actually reverse the transaction because the digital currency is shifted from one node to another with the transaction recorded in all the nodes of that network. This record cannot be cleared by anyone. Therefore the transaction once done cannot be reversed by the government, the bank or even the data miners.
Applancer is an open platform for discussion on all things like Blockchain , Cryptocurrency and Ico news updates. As such, the opinions expressed in this article are the author's own and do not necessarily reflect the view of Applancer .
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