What is blockchain technology?
Blockchain tech is usually referred to as a “digital ledger”. Blockchain is a structure that keeps transaction records that can be known by a block, the databases of the public are known as a chain. It’s connected through peer-to-peer network facility. Most of the transaction in this digital ledger is mainly authorized by the owner’s digital signature, which processes the transaction and secures it from getting tampered. In simple words, you can understand digital ledger is very similar to the spreadsheet of Google which is shared on various computers by the network, and transaction records are stored with the actual purchase. The interesting angle for blockchain is that anyone can see the data, but can’t tamper with it.
How does it work?
Blockchain works with a combination of multiple techs.
# Cryptographic keys:
It contains two keys – a public key and a private key. The keys help in processing the transaction between two parties. And every party has a digital secure identity which is known as a digital signature. The digital signature is the most important thing for secured transactions. The signature has collaborated with a p2p feature. When two persons make transactions with these keys. Then, the first party will attach the transaction info to the public key of the second party.
# Hash Encryption:
Blockchain uses hash encryption for securing the data mostly by algorithm SHA256. The address of receiver, sender, transaction amount and many more details of the transaction is secured by SHA256 and this encryption is known as hash encryption. And it is circulated in the world after the verification. The algorithm of SHA256 is nearly impossible to hack.
# The working proof:
This contains four parts:
-Previous hash – The address of the hash locates the last block.
-Transaction details – All the necessary details for the transaction.
-Nonce – An arbitrary digit to differentiate between the hash addresses.
-Hash address of the block – All the above information is processed through hash encryption, which gives an output length of 256 bit, 64 characters known uniquely as hash address. People usually try to find this predetermined condition through computational algorithms. The transaction only completes when this condition is fulfilled.
Blockchain has various features in the digital world:
1)Automation capability – It can generate systemic events, actions, and many automatic payments when all the required conditions are fulfilled. It’s highly programmable.
2)Highly secured – It always uses the owner’s digital signature feature to proceed with fraudulent free transactions by making it impossible to change the data or corrupt the data of a person by any fraud person without the digital signature.
3)Decentralized network system – For this, you require the approval of the authorities like from a bank for processing the transaction. The transaction is done by mutual consent of users resulting in safer, smooth, and faster transactions.
Blockchain has an infinite number of applications almost in every industry. This digital ledger is applicable for tracking fraudulent scams in finance, sharing secured reports with their users. It also helps users in tracking intellectual property for their business.