Blockchain Technology
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Blockchain Technology
Subject – Science and Tech
Context – “Blockchain is a technology I believe in and it is different from crypto. I believe in real time and expect everything will settle in real time. Smart contracts will also become real,” Reliance Industries Chairman Mukesh Ambani said.
Concept –
- Blockchains are a new data structure that is secure, cryptography-based, and distributed across a network. The technology supports cryptocurrencies such as Bitcoin, and the transfer of any data or digital asset.
- Spearheaded by Bitcoin, blockchains achieve consensus among distributed nodes, allowing the transfer of digital goods without the need for centralized authorisation of transactions.
- The present blockchain ecosystem is like the early Internet, a permissionless innovation environment in which email, the World Wide Web, Napster, Skype, and Uber were built.
How it operates?
- The technology allows transactions to be simultaneously anonymous and secure, peer-to-peer, instant and frictionless.
- It does this by distributing trust from powerful intermediaries to a large global network, which through mass collaboration, clever code and cryptography, enables a tamper-proof public ledger of every transaction that’s ever happened on the network.
- A block is the “current” part of a blockchain which records some or all of the recent transactions, and once completed, goes into the blockchain as permanent database. Each time a block gets completed, a new block is generated.
- Blocks are linked to each other (like a chain) in proper linear, chronological order with every block containing a hash of the previous block.
Benefits of blockchain technology:
- As a public ledger system, blockchain records and validate each and every transaction made, which makes it secure and reliable.
- All the transactions made are authorized by miners, which makes the transactions immutable and prevent it from the threat of hacking.
- Blockchain technology discards the need of any third-party or central authority for peer-to-peer transactions.
- It allows decentralization of the technology.
To know about Blockchain Technology: Layer-1 and Layer-2 Networks, please refer November 2021 DPN.