Blockchain Technology was first introduced by Satoshi Nakamoto, in his White Paper on Bitcoin in January, 2009.
Bitcoin is a kind of a digital currency that allows you to make anonymous p2p (peer-to-peer) transactions without the need of an intermediary such as a government or a bank.
Even though Blockchain was, in its earlier days, associated with Bitcoin; its first application — its utility has now far outgrown that of Bitcoin.
Blockchain has managed to attract the attention of many major global players such as Microsoft, IBM, Ernst & Young, Accenture, and United Nations.
“ What the internet did for communications, blockchain will do for trusted“ What the internet did for communications, blockchain will do for trusted transactions.” — Ginni Rometty, CEO, IBM.
What is Blockchain Technology?
Blockchain can be used for the transfer of any asset where exchange of information and ownership is required.
There is no central authority that has control over this information. The information is appended or updated through the community rather than any individual authority.
How does Blockchain work?
The practical consequence […is…] for the first time, a way for one Internet user to transfer a unique piece of digital property to another Internet user, such that the transfer is guaranteed to be safe and secure, everyone knows that the transfer has taken place, and nobody can challenge the legitimacy of the transfer. The consequences of this breakthrough are hard to overstate. — Marc Andreessen, Developer, Mosaic.
What is so special about Blockchain?
Blockchain Technology offers many advantages over traditional technologies when it comes to verifying transactions:
- It is decentralized. There is no single authority controlling the blockchain; it is instead controlled by the entire network consisting of multiple nodes (computers).
- It is cost-efficient. An extraordinary amount of money has to be spent on intermediaries to verify the transactions/ exchange of information. Blockchain eliminates the necessity for any intermediary.
- It is time-efficient. On a blockchain, transactions can be near-instant. It is possible to verify 1000s of transactions in less than a second.
- It is transparent. Every transaction that has ever happened on a blockchain is visible to everyone. No manipulation of this data is possible for anyone.
- It is immutable. Since the blockchain is decentralized and there is no central authority, no mutation of information on the blockchain is possible. The entire blockchain is policed by a network of nodes and any illegitimate changes by a vested party can be overruled by the majority of nodes on the blockchain near-instantly.
- It is irreversible. No transaction once accepted by the blockchain can be reversed. Since there is no intermediary or central authority, the movement of funds can’t be controlled; it is just like paying in cash.
- It is pseudonymous. The blockchain addresses which are used to carry out the transactions are just random strings of alphabets and numbers; they do not reveal any personal information about the User. However, it is still very easy for anyone to show that they control a particular address, through their ownership of the address’s private key.
- It is secure. It is extraordinarily difficult for any single entity to gain enough influence over a blockchain to be able to verify a fraudulent transaction. Even if such an influence is gained, it will drain the resources far more can it ever lead to any benefit.
Author- Neer Varshney, Velix.ID