If you have heard of Bitcoin (which you probably have), you must have also heard of Blockchain Technology. Many people are calling this revolutionary and many top institutions are already employing this technology. But what it really is?
Blockchain is a digital decentralized public ledger where transactions are recorded. The individual transactions – also called blocks – are recorded and added to the ledger in chronological order. There isn’t any central institute that handles the bookkeeping. It is completely independent.
The block or recent transactions are recorded through cryptography. And once it is recorded, it goes to the blockchain as a permanent database, which can never be altered. Each block usually contains a cryptographic hash pointer as a link to previous block. It’s actually what its name says, a chain of blocks.
This whole database – that is continuously growing – is created by a technology known as blockchain technology.
The main reason why blockchain technology came into existence and became so popular is because of the transparency and meddle-proofing in recording transactions it brings. Also, transactions recorded on digital ledger are much cheaper and quicker. This is the biggest reason why many tech companies and organizations in financial sector are taking up this sector.
India’s largest bank SBI (State Bank of India) has already announced that it soon will be using blockchain for smart contracts and KYC. Expect more joining this bandwagon as this technology matures
The blockchain is a system in which records of transactions are made in bitcoin or another cryptocurrency. It is maintained among several computers that are linked together in a well-formed network. This technology is like an internet which has built-in robustness.
The blockchain technology cannot be controlled by a single entity and it has no single point of failure.