Blockchain as a technology came into existence with the launch of bitcoin and other cryptocurrencies. Since Bitcoins are decentralized(i.e. they do not have any centralized authority to validate a transaction)- but as we all must agree verification is necessary to validate that a transaction has taken place.
In a peer-to-peer network a ‘block’ is a ‘record’ that gets added to the chain when a transaction takes place and is distributed to all the computer system connected to the network. In more simpler terms its like the ledger account that we prepare for our business which keeps a record of all the transactions that have been made by the business in a chronological manner, with the only difference being that here its distributed in every 10 minutes to all the people connected to the network. This is done so that the transaction is verified by the entire network and at the same time is available to all and cannot be tampered with thus eliminating the need for a centralized authority.
Once the transaction is verified it gets added to the block of chain which can easily be reconciled.
Why is it becoming so important?
Now, its interesting to note that blockchain records each and every transaction, which means it has a record of all the bitcoins and how have they been traded (even the smallest value- 1/1000000th ) and who is the current owner- which emphasis of two very important point required at this highly technological age-
- existence of complete transparency
- Prevent Online frauds –since each and every transaction is verified by the entire community, is reconciled and is distributed freely –making it hard for the hacker to tamper with a freely available data.
An important thing to note is that once a transaction takes place it cannot be undone- i.e. it is present there forever. Making this technology readily popular among other verticals as well.
Why Getting Famous?
Since the electronic ledger is freely distributed and reconciled at every step- BLOCKCHAIN technology is here to make business operations simplified. The most recent advent being in Stock market exchanges. Not only does blockchain has a solid potential where the financial holding are concerned, there is also potential is using this technology for weapons, vehicles, diamonds etc.
The other side of the coin
Since blockchain accounts fr all the transactions ever taken place –it also requires huge processors and a lots of maintenance to store such huge information that is getting added with each passing day.
There are a lot of studies that are taking place to use this new and advanced internet technology, especially to replace the inefficient accounting system and replace it with blockchain. So after all, future is not that far