What is Blockchain Technology? A Step-by-Step Guide For Beginners

What is Blockchain Technology? A Step-by-Step Guide For Beginners

Updated On Nov 29, 2020

Have you ever knew about blockchain? If not, here is the comprehensive guide that will let you to know the absolute about blockchain. In recent times, the prime thing that revolutionizing the world is Blockchain which is considered as the dawn of era.

Fine, Now let us step into the the blockchain world. Here is the complete guide of blockchain for beginners.

What is Blockchain?

In simple terms, Blockchain is a time-stamped series of immutable record of data which is owned only by cluster of computers not by any single entity. Each of these blocks of data (i.e. block) are secured and bound to with one another through cryptographic principles (i.e. chain). This secure connectivity so called Blockchain

What Makes Blockchain Special?

The thing which makes blockchain network special is the absence of  central authority which is the very definition of a democratized system. As it is a shared and distributed ledger, the data in it is open to everyone. Therefore, anything which is built on the blockchain is transparent by its nature and everyone engaged is responsible for their actions.This is the reason behind to say that it has industry disrupting capabilities.

Why Blockchain?

The three pillar strengths of blockchain technology makes it as a matchless one.

(i) Decentralization

(ii) Transparency

(iii) Immutability

(i) Decentralization

Now, centralized systems have treated us well for many years, however, they have several vulnerabilities. The following points describes how centralized network works.

1. The data stored in one spot becomes an easy target spots for the potential hackers as it is centralized.

2. The entire system system would halt, when the centralized system go for the software upgrade.

3. No one can access the information, when the centralized entity shut down for whatever reason.

Worst case scenario

What happens if this entity gets corrupted and malicious?

If this scenario occurs, then all the data inside the blockchain will be compromised.

These are the reasons to go for decentralized network.

In a decentralized system, the data is not stored by one single entity. In fact, everyone in the network can access the information.

If you desire to interact with your friend, you can do so directly without any intermediaries (third parties). To point out, this was the main ideology behind Bitcoins. You only is in charge of your money and there is no place for the intermediaries. You can send your money to anyone and anywhere you want without having to go through a bank.

(ii) Transparency

“Transparency”, one of the most fascinating and misunderstood concepts in blockchain technology. Some say that blockchain gives you privacy whereas some say that it is transparent.

Well, digs to know how it works? Let me explain. It hide the persons identity through cryptography and depict their public address only. So, if you wish to see transaction history of any person, it will not display like “jack send 1 BTC“ instead of it displays like “1MF1bhsFLkBzzz9vpFYEmvwT2TbyCt7NZJ sent 1 BTC”.

Even though, the person’s real identity is secure, you can view all their the transactions with their public address. This transparency level has never subsist before within a financial system. This is the reason to look for transparency in blockchain.

(iii) Immutability

Immutability, in the sense symbolizes that once something has been enter upon into the blockchain, it cannot be tampered with.

Can you imagine how valuable this will be for financial institutes? To point out, cryptographic hash function is the reason to get immutability property in the blockchain.

In simple terms, hashing means taking an input string of any length and giving out an output of a fixed length. In the context of cryptocurrencies like bitcoin, the transactions are taken as an input and run through a hashing algorithm (bitcoin uses SHA-256) which gives an output of a fixed length.

Video Source : Blockgeeks

Network and Nodes of Blockchain

The blockchain is retained by a peer-to-peer network. The network is a aggregation of nodes which are coordinated to one another. In general, nodes are individual computers which take in input and execute a function on them and furnish an output. The “peer-to-peer network” divides its absolute workload between participants, who are all equally favored, called “peers”. There is no longer one central server, now there are various distributed and decentralized peers.

Who Will Use the Blockchain?

The blockchain potentially cuts out the middleman for these types of transactions. The industries or individuals which focus on these transparent and immutable characteristics will utilize blockchain. On the other hand, who mainly focuses for the secure transaction will surely go for the blockchain. To mention that, online transaction are closely connected to the process of identity verification.

Blockchain Solutions for Industries

The blockchain makes several industries to shine and have their unique place without any fraudulent activities. Industries like healthcare, insurance, Ecommerce, gaming, real estate, supply chain and so on will acquire decentralized solutions and shine in this competitive world. This is also a part of the reasons to consider blockchain as a wondering technology.

What New Applications Blockchain will bring us?

The blockchain will bring us the following new applications.

1. Smart Contracts

2. The sharing economy

3. Crowdfunding

4. Governance

5. Supply chain auditng

6. File storage and prediction markets and so on.

All these astounding traits, services and solutions of blockchain are the reasons to consider blockchain as an immutable technology. Still enthutiatic and anxious to know more about blockchain? We, Osiz technologies, a leading blockchain development company undergoes end to end blockchain development services and furnish blockchain solutions to the industries. Feel free to engage with our blokchain developers and consultants

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