Blockchain Technology

Blockchain Technology
Why is the world becoming so complicated, or rather too technical for one’s liking, is it a
good thing or not, maybe but then again welcome to fintech? After successfully
implementing crowdfunding and buying a few crypto-currencies, business looks good, but
now you want to understand the dynamics of what makes crypto assets possible. Why are
they so secure, and how are they decentralized?
What is blockchain technology?
Blockchain technology is a peer-to-peer (person-to-person) decentralized distributed ledger
technology that makes the records of any digital asset transparent and unchangeable and
works without involving any third-party intermediary. It is an emerging and revolutionary
technology that is attracting much public attention because of its capability to reduce risks
and fraud in a scalable manner.
Why are they secure and decentralized?
A decentralized network offers multiple benefits over traditional centralized networks,
including increased system reliability and privacy. Moreover, such networks are much easier
to quantify and deal with because there is no single point of failure.
The P2P design of blockchains provides several benefits, such as greater security compared
to traditional client-server-based networks. A distributed P2P network paired with a majority
consensus requirement provides blockchains with a high degree of resistance to malicious
activities.
Decentralization would simply mean that no one person/group/entity controls or regulates the
activities that happen. All transactions happen between two people; hence, peer-to-peer and
are no central agency where the funds must be validated or checked.
How does blockchain work?
A blockchain is a shared ledger that allows hundreds of connected computers or servers to
maintain one secured and absolute ledger. A blockchain can accomplish user transactions
without involving third-party intermediaries. To perform transactions, all one needs is to have
a wallet, not the one in your pocket. A Blockchain wallet is nothing but a program that allows
one to spend on cryptocurrencies. These wallets are secured using cryptographic methods
(public and private keys) so that they can manage and have full control over their
transactions.
This is how blockchain works. First, when a user creates a transaction over a blockchain
network, a block is created, indicating the creation of a transaction. Once a block is created,
the requested transaction is broadcast over the peer-to-peer network, consisting of computers
known as nodes, which then validates the transaction.
A verified transaction can involve cryptocurrency, contracts, records, or other valuable
information. Once a transaction has been verified, it is combined with other blocks to create a
new data block for the ledger.
It is important to note that, with each new transaction, a secured block is created, which is
secured and bound to each other using cryptographic principles. Whenever new blocks are
created, they are added to the existing blockchain network, confirming that it is secured and
absolute. It is worth noting that if a block is tampered with and does not correspond to the
other blocks, it will be rejected and not added to the block.
Benefits of blockchain
Immutability
In a traditional database, you must trust a system administrator that he is not going to change
the data. However, with blockchain, there is no possibility of changing or altering the data,
the data present inside the blockchain is permanent, and one cannot delete or undo it.
Transparency
Centralized systems are not transparent, whereas Blockchain offers complete transparency,
by utilizing blockchain technology, organizations and enterprises can go for a complete
decentralized network where there is no need for any centralized authority, thus improving
the transparency of the entire system.
High Availability
Unlike centralized systems, Blockchain is a decentralized system of P2P networks which is
highly available due to its decentralized nature. Everyone or rather most are on a P2P
network, and most have a computer running, therefore, even if one peer goes down, the other
peers still work.
High Security
Technology is assumed to offer high security, as all blockchain transactions are
cryptographically secured and provide integrity. Instead of relying on a third party, you need
to trust cryptographic algorithms.
Conclusion
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Blockchain Technology

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