According to Statista, the global blockchain market is projected to reach 60 billion GBP by 2026. The use cases of blockchain technology are vast and diverse, ranging from finance and healthcare to supply chain and voting systems. Understanding the blockchain process is crucial to harnessing the full potential of this technology. Blockchain Certification is an easy way to understand its technicalities and get to know all the advantages and Disadvantages of Blockchain technology.
In simple terms, Blockchain is a system of storing data or information that makes it difficult or nearly impossible to hack, change or cheat it. Technology is the future, and people with skills in this arena will be in high demand in the upcoming years. In this blog, you will learn more about the process of Blockchain and how it works.
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Table of Content
- What is Blockchain?
- The advantages and disadvantages of blockchain
- Process of blockchain
What is Blockchain?
Blockchain is a digital ledger, that records transactions transparently and securely. It is like a chain of blocks, where every block contains information about verified transactions. After a block is added to the chain, it cannot be altered or deleted, making it very difficult or nearly impossible to tamper with the information stored in the Blockchain. It is maintained by a network of computers, making it decentralised and secure. This technology has many advantages in various industries, including finance, healthcare, and logistics; meanwhile, it has some disadvantages.
The advantages and disadvantages of blockchain
Decentralisation: There is no single point of control in blockchain, making it more secure and less vulnerable to cyber-attacks.
Security: Transactions on the Blockchain are authenticated using complex algorithms that make tampering with the information stored in it impossible.
Efficiency: The process becomes quick due to no intermediaries facilitating transactions in blockchain technology.
Lack of regulation: The lack of regulation surrounding Blockchain technology can lead to concerns about privacy and security.
Energy Consumption: The extensive process of verifying transactions on the blockchain can be energy-intensive. It leads to concerns about environmental impact of blockchain technology.
Complexity: The technology used behind blockchain can be complex for non-technical people.
Process of Blockchain
Blockchain technology is transforming the way we interact with one another. The process of Blockchain involves:
- Creating a block of transactions
- Verifying them
- Adding them to the Blockchain
- Updating the Blockchain
It differs from traditional databases as it is decentralised, immutable, and secure. As Blockchain continues to evolve, it is essential to understand its process and its potential for shaping our future.
The first step in the process is to create a block. A block is a collection of transactions verified and confirmed by a network of computers, also known as nodes. Once a block has been created, it is added to the existing chain of blocks, hence the name “blockchain”.
Before a transaction can be included in a block, it must be verified by the nodes in the network. This is done using complex algorithms that ensure the transaction is valid and not fraudulent. Once the nodes have verified the transaction, it is added to a block.
Each block contains a unique code, also known as “hash”, generated using the data in the block. This hash is then added to the next block in the chain and the previous block’s hash. This creates a chain of interlinked blocks, with each block containing a unique hash that verifies its authenticity.
Once a block has been added to the chain, it cannot be altered or deleted. This is because each block’s hash depends on the previous block’s hash. If a block is tampered with, its hash will change, which will, in turn, change the subsequent block’s hash. This makes it virtually impossible to alter the Blockchain without being detected by the network.
As Blockchain continues to evolve and gain wider adoption, it will be great to see how this technology transforms various industries. Although there are challenges to overcome, the benefits of Blockchain cannot be overlooked. Technology has the potential to revolutionise industries by tamper-proofing it. Blockchain does that by decentralising the records and data and keeping them transparent and secure.