A beginner's review on Block Chain Technology
What is Block Chain?
As the name suggests, a Block Chain is an evolving list of data, called blocks which are linked to each other by using cryptographic methods. Each block contains 3 specific features that are unique to each block and can't be duplicated. These 3 features are-
- A cryptographic hash – A special hash value, that is used to identify the previous block.
- A timestamp – The timestamp denotes the exact time when the block was created.
- Transaction data – The block also contains some data that can be used is called transaction data.
A certain block can always have unique cryptographic hash and timestamp, but may contain same transaction data.
The Block Chain technology was invented by a person or a group of person operating with the market name Satoshi Nakamoto in 2008. This was developed to serve as a public transaction record book for the cryptocurrency ‘Bitcoin'.
Why was Block Chain introduced?
Block Chain technology was initially introduced in 2008 to improvise to use of the digital cryptocurrency Bitcoin. The Block Chain technology overcame the double-spending problem, thus making Bitcoin the first successful cryptocurrency.
Double-spending – Before the introduction of Block Chain technology, the digital currency had a single digit token, which could be counterfeited or falsified thereby using the same piece of money for two or more uses. Thus the amount of counterfeit cryptocurrency grew proportionally. To tackle this problem the Block Chain technology was used and thus each piece of the cryptocurrency had 3 specific identities that couldn't be duplicated. Thus Bitcoin became the first official cryptocurrency to solve this problem.
Uses of Block Chain technology-
After being introduced in 2008, Block Chain technology has grown exponentially and developed far beyond comprehension. Since it reduces human work to nil and also because of its capacity to generate unique blocks, it is used in variable fields widely. Some of the most popular uses of Block Chain technology are-
- Cryptocurrency – Most cryptocurrencies available use Block Chain technology to maintain its unique serial number. Bitcoin and Ethereum are two of the most valuable cryptocurrencies that use Block Chain technology.
- Smart Contracts – Contracts that need no human interaction to be fulfilled and can be conducted using Block Chain technology are called as Smart Contracts. These contracts generally have a plan and conditions laid out which when fulfilled automatically causes the signing of the contract.
- Financial Services – Most of the banks these days use the Block Chain technology to maintain a computed ledger that stores banking data automatically. It also speeds up the banking process.
- Supply Chain – The Block Chain is also used to keep stock and number and name goods generally according to their order of arrival. Companies like Wal-Mart and IBM cloud use this technology to keep stock of goods.
What are the advantages of Block Chain technology?
The block Chain technology has gained a lot of importance since its invention in 2008. Following are a few advantages of Block Chain technology-
- Due to the use of 2 unique codes, each block is unique and can't be reproduced. This paves the way to enhanced security and dependence.
- The data that the Block Chain consists of is append-only meaning that they can't be deleted or overwritten but can only be further added.
- Since the transaction is transparent, thus there is no chance of data loss or theft of data.
- Any doubtful data can be traced back to its origin by tracing it through the blocks.
- Since the data is distributed across multiple blocks, thus no cases of memory overload takes place.
What are the disadvantages of Block Chain technology?
Although Block Chain is very secure and also has other pros, just like the other side of the coin, it also has some disadvantages. Following are the disadvantages of Block Chain-
- Extreme Volatility – The cryptocurrencies that use Block Chain technology are highly volatile. This is because the transaction data present in the blocks get affected even by small changes. This can be understood by the variable Bitcoin price.
- Safety – Due to the presence of uniqueness, cryptocurrencies using Block Chain are very safe. This, however, causes no problem for the criminals as they create their own Block Chain technology to overcome the problem and end up doing illicit transactions.
- Storing Cryptocurrencies – Due to the large volatility of the price, most cryptocurrency users don't end up converting the digital money into hard money. They keep it stored in some digital vault or some intelligent people keep using them in transactions so that they might not be targeted. This is also a grave matter of concern since hackers tend to search for large transactions and often target those.
What is the future of Block Chain technology?
After its invention in 2008, Block Chain technology has been used in several fields across the globe. Experts say that the cryptocurrency market may or may not go broke in a few years, but the use of Block Chain will always persist in some way or the other. Here are a few possibilities that the future might hold-
- E-books and music Covers can be fitted with a Block Chain code wherein all the purchases are directly stored in the block and transferred to the author. This takes care of all commissions and extra payoffs that bubbling artists and writers have to deal with.
- Block Chain will change the way how share-market works and also bring changes to the current system of loans. This will cause a tremendous revolution in the banking world.
- Piracy of content can be protected to a certain degree by storing legitimate transactions and checking it for irregularities consistently.
Whatever the future of Block Chain technology beholds, one definite thing is that whatever happens the technology in itself is far from dormancy. However, what we use the technology for is always in our hands.
If you are a logical thinker and want to participate in a fast-growing industry that threatens to revolutionize the current market then Block Chain technology can help you. These courses for Block Chain Certification will help you to gain a strong foothold in the industry.