What is Blockchain Technology? How Does It Work?
Blockchain technology is preparing to launch a second technological revolution and this technology is dedicated to storing digital transactions via the Internet, verifying their authenticity, licensing and securing them with the highest levels of security and encryption. But, what is Blockchain Technology? and how does It work?
Blockchain technology is considered one of the technologies that are impossible to overcome or break, and it must be noted that this technology will have a place prestigious in the world of technology, as it will be the window to the world of innovations and inventions in the world of the Internet.
So, what is Blockchain Technology?
Blockchain is a technology that allows a person or company to transfer assets of value to another person safely and without the intervention of any intermediary.
A blockchain is simply a series of records, or fixed blocks of data, that are managed by a group of computers that are not owned by any single entity. Data blocks are secured (block for short) and are linked to each other using cryptographic principles.
The blockchain network is independent, not subject to any central authority. It is essentially a shared and fixed record with open and available information to anyone to see. Thus, anything built on the blockchain is inherently transparent. Also, transactions on the blockchain are free and have no direct cost.
How does Blockchain Technology Work?
Blockchain is a simple and innovative way to pass information from person A to person B in a fully automated and secure manner. If you want to falsify a single transaction or record, you should fake the entire chain on millions of computers and this is practically impossible.
Technically, a blockchain is just a chain of data blocks. Of course, the words blocks and chains in this context refer to digital information (block) stored in a public database (chain) and this is how “block chain” are connected.
One of the famous digital currencies that is based on blockchain technology is the blockchain of Bitcoin. When this new block is added to the blockchain, directly it becomes available and noticeable for everyone.
For example, in the case of Bitcoin, which is, you can visit the Bitcoin blockchain website, and you will see that you can access transaction data. Of course, these blocks are not only stored in the site server, but are stored in all computers that connect with this blockchain at the same time, and this is the strength of the blockchain, as its decentralization makes hacking impossible.
Blockchain applications and how we can use them:
Perhaps the most important application of the blockchain at all is Bitcoin, which has occupied the world in the past few years.
Several years ago, an unknown person under the name of Satoshi Nakamoto accessed the Bitcoin protocol. The new revolution of finance and technology began, which has shaken the global economic system and still till the moment.
Bitcoin is open-source, no one owns or operates the Bitcoin network and anyone can participate in it.
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- Smart contracts
A smart contract is computer code that can be embedded in the blockchain to write, verify, and negotiate a contract. Smart contracts operate under a set of conditions that users agree on. When those conditions are met, the agreement is automatically executed.
One of the most popular smart contract platforms is Ethereum. It is an open-source project that exploits blockchain technology.
- File storage
Storing files on the web decentralized has many benefits. The distribution of data over a network plays a significant role in protecting files from hacking or loss.
- Intellectual property protection
In the online world, digital information can be produced and copied without limits, and distributed on a large scale.
Smart contracts play an important role in protecting copyrights and automating the sale of creative work online, reduce the risk of file copying and redistribution by eliminating the need for intermediaries, and sell products directly to consumers.
A lot of banks and companies have adopted blockchain technology to transfer money, assets, and data. Blockchain technology has also entered the fields of business, finance, healthcare, supply chains, insurance and logistics. It is expected that by 2027, all companies will be using the blockchain.
With the many practical applications of blockchain technology, which is already used in many sectors, the future of blockchain looks promising.
