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What is Blockchain Technology?
Blockchain technology is a technology discovered in 1991. Blockchain is simply a chain of blocks containing information. The technology’s motive was to timestamp digitally available documents as time stamping of digitally available documents can protect from backdating documents. But the technology came into use in the year 2009 by Satoshi Nakamoto to create Bitcoin(cryptocurrency). Satoshi Nakamoto is the name taken by the assumed pseudonymous individual or the bitcoin creators, prepared the white paper of bitcoin, and made and conveyed bitcoin’s unique reference execution.
Structure of a Block
Each Block Contains Three Parts
- Data: Data is the information to be stored in the block. The stored information in the block depends upon the type of block.
- Hash: Hash is the combination of characters that helps to identify a block and is always unique. Hash generates with the creation of a block, and hash changes every time the information changes.
- Hash of the previous block: The hash of the previous block is the hash code of the chain’s preceding block.
Exception: The first block, also called Genesis Block, does not point to the previous block as it is the starting block of the chain.
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Blocks are arranged so that each block points to the preceding block, forming a chain of blocks. The change in one block will make all the preceding blocks invalid. So, to maintain the integrity of the blockchain, proof of work is used.
Proof Of Work: Proof Of Work is a useful technique that slows down the new blocks’ creation process. For Bitcoins, it takes approximately 10 minutes to calculate proof-of-work and add a new block to the blockchain. Any change in one block requires the new proof of work of each preceding block of the chain to maintain the chain’s integrity.
What is a Smart Contract?
Nick Szabo, a computer scientist, law scholar, and cryptographer, defined a smart contract as a computerized protocol that manages transactions and executes the contract’s terms. Smart contracts are very similar to real-world contracts. The only difference is that these contracts are virtual instead of physical. The smart contract is a small computer program stored in a blockchain that eliminates the need for a third party. The smart contract is a fast, secure, and vital trust factor.
Ethereum is an open-source blockchain specifically created to support smart contracts to assist the cryptocurrency called Ether. Ethereum was programmed in Solidity, a programming language specifically designed for Ethereum.
Application of Blockchain Technology in real life
- Payment: Facilitating transactions can be the effective use of Blockchain Technology. With smart contracts, Blockchain technology is capable of removing the third parties that take a long time for the validation of a transaction and can make the fund transfer more efficient.
- Digital Voting: Voting Digitally through our own devices is still a predicament for us. Blockchains can be used to store and cast votes as paper voting is costly and voting through specialized devices is not secure. But many challenges regarding identity and malware persist in the way.
- Real Estate: The primary motive of Blockchain technology is secure and making the transactions/deals paperless as paper brings confusion. Blockchains can be used to store ownership details, making the transactions/deals transparent and efficient.
- Medical Record: The paper brings confusion. As the medical institutes have to record the patients’ details, privacy becomes an issue as the paper records can be easily breached. Instead of paper records, blockchain can be an effective way of storing the data of patients.
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Some of the applications of blockchain technology are mentioned above. Have any suggestions or ideas regarding the application of blockchain technology in real life? Let us know in the comment section, and we will add that to the list.