10 Blockchain Facts That You Must Know
It seems like everyone is talking about blockchain. If Bitcoin is taking the world by storm, credit it to the blockchain technology which is behind it. With an approximate increase of 900% in its value, Bitcoin has a story to tell. The one that the world needs to know. While there’s enough said about the currency itself, it’s time you know some interesting facts about the technology that supports it and everything in between. Here are the top 10 facts about blockchain you must know!
1. BlockChain Works Like a Distributed Ledger
In simple words, blockchain is a real-time ledger of everything financial that can be recorded and there is no one particular person in charge of it.
So, how does blockchain work? Blockchain works on a peer-to-peer network of computers called nodes. It is an ingenious way to decentralise chronologically documented transactions. So, when two parties enter a transaction, the information is broadcast to nodes of the network. This is one of the rare known blockchain facts.
Blockchains can also make other types of digital currencies and values. It is the brainchild of Satoshi Nakamoto. From its origin as a mere technology, it has come a long way. Today, blockchain is like a new type of internet.
2. Blockchain records cannot be altered.
In simple words, whenever a transaction is recorded, all the accounts are updated with the information. These transactions are then grouped together in blocks. These blocks are linked to every block that comes before it. This results in a record that is chronologically substantial and cannot be tampered with. This is because every block gets a reference to the hash of the previous block. The system ensures that the position of the block is static and it cannot be altered.
3. More Than One Use.
You can implement a Blockchain in more ways than one. Many people seem to think that there is only one blockchain that is used by everyone. That’s not true. Don’t mistake it for single service. Blockchain has no value in itself and its value increases only when it works in conjunction with other applications.
4. The blockchain is transparent.
Even as many have their doubts, in reality, Blockchain is transparent. The mechanism is designed to make everyone accountable. The mechanism ensures that there are no missed transactions or machine errors. Even if there is an exchange without the consent of the parties involved, it’s traceable. The transactions are recorded on a connected system of registers which are connected through a secure system.
How is it possible?
The reason is among the top 10 facts about blockchain Well, the network works in a state of consensus. It checks itself automatically every 10 mins. The entire system is that of self-auditing. The digital values are self-audited and are the network is updated with a transaction and in short intervals. Because the overall network is so hard to override, any information on the blockchain remains safe at all times.
5. The blockchain is a decentralised technology.
There are many benefits of blockchain. The blockchain is designed as a decentralised technology. So every transaction that happens is a network function. With this technology enables businesses to monetise open source protocols for decentralised exchange. The most important benefit is rapid commerce.
6. The blockchain is not just virtual currency.
For all those who thought it is so— bitcoin and blockchain are not the same things. Here’s a clarity. They are mentioned in the same discussion only because blockchain is the tool that makes bitcoin viable. But while Bitcoin happens to be the most popular use of the blockchain tech, there’s so much more to it. For example, through blockchain, artists can pay directly every time someone buys their song. This takes the commission by various purchasing platforms straight out. It’s about creating a direct relationship between a service provider and a customer.
Take voting for instance. Through blockchain, a vote is super hard to alter, once made. That’s because it is a transparent medium. It makes any kind of online fraud so much more difficult.
7. Private and Public blockchains are different.
This is something most people don’t know about blockchain technology. They are different for private and public domains. The centre point is basically about participation. As in, who is allowed to participate and who isn’t. As for a public blockchain, it is open to everyone who wants to be part of it. A large number of transactions makes the verification process slower. This is what happens in case of Bitcoin.
About Private blockchains, they are controlled by a single entity, this is the only party who is allowed to participate. It is this individual or party or business that sets the rules and regulations and decides how these transactions will be governed. These transactions are faster than those in the public sector because the participants are limited.
There is also something called the consortium blockchain. This where no one has a complete control. A particular set of nodes are allowed to participate and no one, in particular, has full control. For instance, 5 companies are authorised to operate a node, they are all authorised.
8. Blockchain is cryptographically protected.
What does this mean? The user can make new changes in blockchains based on personal actions that have happened before, due to encryption. No user can make an entry on someone else’s behalf as there is a cryptographic key owned and known only by the specific user.
9. Blockchains allow executable computer code.
Apart from keeping the entries on fund transfers and everything else that can be stored digitally. Blockchains allow executable computer code that you can write the code in a way that it works every time the parties who are working together to enter the cryptographic key. This is what they call Smart Contracts as the agreement is predetermined and both the parties work under a set of rules laid earlier.
10. Best Place To Keep Your Money
While everybody is talking about how this currency is a no-show for criminals, the truth is, this is where you can keep your money safe. Decentralization has made this option a good way of saving your money from criminals but it’s a great place even if you don’t live in a politically unstable environment. If you think you can’t keep your money with the local bank and are looking for a stable place to keep it, this is it.
Many challenges are ahead for blockchain.
There’s a lot of scepticism about its use. There are many issues the technology is still facing its scalability. For instance, for decentralising transactions, when a transaction occurs, or for it to occur, it must happen on every device in the network. This will only get bulkier as more people sign up for it.
The times are changing and technology is only making things easier. Even with Blockchain explained, the world is yet to see how far it goes in making things simpler. And if we can use it to conduct all kinds of transactions, big and small, we might see a time when no financial frauds will take place.
Well, as blockchain gears up to take on the world by storm, these are the basic facts you should know to stay ahead of the times. It’s transparent. It’s reliable. And it’s the next big thing.
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