Blockchain is a specific type of database. The term Blockchain was brought to light in 2008 by Satoshi Nakamoto. However, it got its fame when bitcoin became popular and needed a secure system to record transactions. The original idea was to improve the quality of the ledger systems and data maintenance. It is a technology that passes the data from one network to another with the original information from its source.
In block-chain technology, other blocks are an identical replica of the source block where any change in the source block will be applied to all the blocks. This data sharing creates network blocks and the process of passing data from a network to network becoming a chain of digitally recorded blocks and that’s how it got its name Block-chain. These blocks are in the form of a Merkle tree or hash tree where every block is connected with its source block and all information is passing through the top hash.
Structure of Blockchain
The concept of blockchain started with the word cryptography. Cryptography is making codes to secure the connection from getting breached or read by a third party, which is not allowed to get into the server. Block-chain is a fundamentally secured system to prevent data from getting altered, changed, or distributed to an unauthorized party.
Cryptography makes sure that without the crypto key, data can’t change from the source or any of its connected blocks. The owner of the server has two crypto keys one of them is private and another one is public. The public key is used by all the connected servers to check and identify the integrity of given information and the private key is used only by the owner of the source block. However, these crypto keys are not enough to make changes in data. It takes a majority of connections to validate the changes after that it would be possible to alter information.
Functions of the Blockchain
In the present time, every sector which is working in the area of data collection and sharing has concerns with its security. Data could be lost or altered, which puts information of the data into the wrong hands and could be misused for any purpose. Blockchain is a perfect answer to these problems that create multiple connections globally so that the information is secured from getting lost or breached. These are the main reason why Blockchain is widely getting accepted –
- Transparency - Blockchain is secured by cryptography which increases its standard of transparency on data and information. Transparency is the most demanded approach in every sector where service, product and consumer, and provider and producer relationships are obtained. Blockchain technology contains the information of source from where activity gets started, when and who is in charge, and more.
From the consumer’s point of view, it’s satisfactory to track all the details and know what they are getting. The major industries, which are adding Blockchain in their business are healthcare, supply chain, and financial institutions where data is the key asset for further development.
- Integrity - Data security is the priority of every company. Tempering, altering, and distributing data without permission is illegal. It deters some major companies, forcing them to look for other options of data security. Blockchain with its decentralization option creates a transparent look of data, where users can look for the information and track the changes.
There now exists a blockchain cloud data service for providers with long-term data storage and security. To ensure the companies, these providers use non-reversible signatures on data so that it becomes more authentic and trustable.
- Cost-efficient - Companies are investing loads of money on record security and maintenance, which is very costly and time-consuming. With the help of Blockchain, records would be more secure and easy to search whenever needed. Decentralization also creates transparency between companies, firms, and business partners so there are no obligations, and everyone can look out for records information individually.
- Time-efficient - Most financial institutions and companies are still moving with the old and manual paper process, where records are contained in registers, which are not secured for the long term. It is also difficult to find information in these paper-based records. Blockchain makes records digital and easy to use in long term.
Currently, blockchain is mostly used for financial systems. Due to its origin, it is connected with bitcoin, its first serving area considered as banking and financial sector. However, if we analyze, the major operations handled by blockchain are to maintain records and secure their integrity and confidentiality. So, many industries would get enhanced with blockchain –
- Transport and supply chain - Highly optimized transport system has connected every part of the world to another. In this situation, it is difficult to understand which product is exported from where and who is the owner, developer, and organizer of the whole operation. This type of large shipment and transportation industry is also facing problems related to payments. Blockchain is a highly integrated cryptographic system where all the data and processes can be stored and accessible whenever needed.
- Healthcare industry – A patient’s medical history describes the previous procedures and treatments taken by him. With the help of blockchain, it becomes easy to track all the records of pre-medical history and start new treatment according to it.
- Insurance sector - Corning in the insurance sector is more common these days, not only consumers and fraud individuals but sometimes insurance companies also use consumer’s weak points as an advantage. Blockchain will help to stop these problems by maintaining records from the starting of an agreement to the end of it.
- Online marketing - Consumers are willing to get what they want; this assumption leads to generate high demands in business. To fulfill these demands Omnichannel distributors and suppliers face conflicts among them related to payment delays, delays in product delivery. and non-satisfactory supply of product. To avoid these situations, blockchain records can be used as an end-to-end description of the product and its origin, supplier, and payment method as well.
- Gaming & betting- Some gaming operators already use blockchain to accept cryptocurrencies and blockchain is already moving into online casinos to benefit players, operators, and games.
- Records of property – Blockchain can eliminate the need for scanning documents and tracking down physical files in a local recording office. When property ownership is verified and stored on the blockchain, owners can trust that their contract is accurate and permanently recorded.
- Banking and finance – By integrating block-chain into the functioning of banks, consumers can see the record of their transactions processed in as little as 10 minutes. Basically, the time it requires to add a block to the blockchain, despite any holidays or the time of day or week. Block-chain also provides the opportunity for banks to exchange funds between institutions more speedily and safely.
Scope of the Blockchain Technology
Blockchain is the leading invention of this century in finance, record management, and secure crypto money transactions. Sometimes block-chain and bitcoin are considered to be wrong. Bitcoin is like a component used in block-chain, as an application blockchain has a wide functioning area, which would develop more with time and research.
Every industry is considering block-chain technology to be useful these days and is trying to add its features to the system according to their requirements. Block-chain is still in its initial phase to find its scope in the business world. Some industries are using it with its basic functions. Government bodies are also finding block-chain as an improvement in their digitization projects. In some countries like the USA, authorities are looking forward to adding block-chain as a new voting system, which can bring more transparency in Presidential elections.
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