Understanding Blockchain:
Like Galia Benartzi says: Blockchain is like a magic book. Anybody can have a copy of this book and write their own line. But when one writes a line in their book, that line is automatically written in all the copy of the books that exist. But in case of blockchain, the lines are transactions(transactions might be related to finance, sales, receipts, data queries,medical records, property records etc.) Every few seconds, all the books check in with every other book to see if the data on the page is in sync. Once this is verified, the page is sealed and the data is immutable (can not be altered). The only way to destroy this book is to destroy every single copy of this book.
The concept of blockchain was introduced was introduced in 1991 but it become popular when Satoshi Nakamoto adapted it to create a digital cryptocurrency: Bitcoin, in 2009. Now, technically speaking, blockchain is a "chain" of "blocks" where each block contains information. The information of transactions are stored in the block in the form of hash(encrypted form of data).
Once a data is written in a block and verified,it is immutable. Blockchain is decentralized(i.e., there is no central authority). Blockchain makes use of decentralized ledger. A ledger is a kind of database where confirmed transactions are recorded.
When you use blockchain, you do not need banks to transfer your money, you do not need brokers to buy or sell anything.
Features of Blockchain:
1. Better Security: Blockchain technology has a better security because there is not even a single chance of shutting down of the system.
2. Immutability: Immutability is a blockchain feature that persists data forever, free from censorship and despite the disincentives to do so for some period. Typically, “forever”.
3. Fault tolerance: Decentralized systems are less likely to fail accidentally because they rely on many separate components that are not likely.
4. Free from scams: It is much harder for users in decentralized systems to indulge in an ways that will benefit them by causing harm to other users.
5. Higher transaction rate: Blockchain transactions can reduce transaction times to minutes and they can be processed anytime as compared to the existing ways of transaction through banks which need much longer period to be processed.
6. Fraud protection: This technology responds very well to the unauthorized changes or malicious tampering. The methods by which information is secured and updated, and as nothing can be changed and the ledger is present across multiple nodes, Blockchain is easier to track.
7. Removes mediator and speeds up the process: The blockchain removes the need of such an mediator and replaces the mediator with a network. Thus is this way Blockchain can decrease the settlement times of many payments transactions.
Blockchain applications:
1. Payment processing and money transfers
2. Monitor supply chains
3. Cryptocurrency (Ex: Bitcoin)
4. Digital IDs
5. Data sharing
6. Copyright and royalty protection
7. Digital voting
8. Real estate, land, and auto title transfers
and many more..
