WHAT IS BLOCKCHAIN IN SIMPLE WORDS?

What Is a Blockchain?

A blockchain is a database diffused that is shared among different nodes of a computer network. In a database, data is stored similarly to blockchain stores data and information electronically in different nodes in an automated format. Blockchain technology has become famous because of its use case in cryptocurrencies such as Bitcoin, Ethereum, and many more for security purposes. Moreover, to maintain a complete record of transactions taking place. This evolved technology guarantees the ease and security of all the crucial information and builds a trust factor without explicitly managing all the records without the involvement of any third party.

What is difference between a blockchain and a database?

One of the crucial differences between a blockchain and a typical database is how information is stored and structured systematically. A blockchain model stores the data and information into groups popularly known as blocks, that are used to store information. Blocks are firstly defined by fixed storage once they are filled they are closed and are linked to the previous block forming a chain of information like nodes in data structures. All the new data is stored in a new block and is linked to the previous block.

A database mainly stores the data in the form of rows and tables also known as tables. On the other hand, blockchain stores the data in the form of blocks that are chained together. This data structure essentially creates a timeline in an irreversible form whenever it is implemented in a decentralized manner. Whenever a block is filled up to its maximum capacity it is set in stone and becomes a part of the timeline. Whenever a block is added to the chain it is updated with the exact time.

Why is blockchain important?

All the businesses, companies, and organizations today work on data and information. The faster data is received and processed it is considered to be more accurate and efficient. Blockchain is the most suitable technology for delivering this type of information as it provides shared, transparent, appropriate, and immediate information that is stored on any system or on a network that can be obtained only by some authorized members. Blockchain technology is capable of tracking orders, payments, production, actions, accounts, and many more. It is also useful in eliminating the half-truth of the transactions by the customers, which boosts confidence as well as new opportunities for any organization.

How Does a Blockchain Work?

The main aim behind this technology was to create an ecosystem to record and distribute information over a network that cannot be updated or changed at any point in time. In this way, blockchain technology is the backbone of the rigid balance sheets, or records of the transactions that cannot be destroyed, altered, or deleted. This is the main reason why blockchain is also known as distributed ledger technology (DLT).

In 1991, the first blockchain project was proposed. The real-life application of blockchain came into use in 2009 with the creation of Bitcoin. Later, the use of blockchain technology exploded via the creation of other cryptocurrencies, non-fungible tokens (NFTs), decentralized finance (Defi) applications, and smart contracts.

Is Blockchain Secure?

Blockchain technology accomplishes decentralized protection and faith in several ways. If you need to begin, unique blocks are permanently reserved linearly and chronologically(according to date). That is, all new blocks created are always attached at the “end” of the blockchain. After a new block is added to the end of the blockchain, it is not possible to go back and modify the data of the block unless a bulk of the network has acquired an agreement to do so. That’s because each block possesses its timestamp. Hash codes are constructed and built with the use of a mathematical operation that turns digital data into a series of digits and alphabets. If that data is altered in any way, then the hash code of the block is also changed.