Demystifying Blockchain Technology

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Demystifying Blockchain Technology

As technology evolves, it affects and impacts our lives and our daily activities. A term that is quite fascinating and intriguing in today's world is Blockchain and the technology that powers it. Blockchain technology has its foundation in a certain digital currency that was developed in the year 2008 by Satoshi Nakamoto. This digital gold boom, led to the expansion of use of Blockchain and its technolgy..

Today in the finanical industry, some banks and stock exchanges use blockchain technology to manage online payments, accounts, and market trading. Some top retail companies use blockchain technology to track their global supply chain across the world. Join me as we learn about and demystify blockchain technology.

The table of contents is as follows:
• What is blockchain?
• What is Blockchain technology?
• Why is Blockchain important?
• What are the features of Blockchain technology?
• What are the key components of Blockchain technology?
• What are the types of Blockchain Networks
• How does Blockchain work?
• Uses of Blockchain technology
• Benefits of Blockchin technology
• Risks of Blockchain technology

What is Blockchain ?
Blockchain is a decentralized database that is shared by devices connected via a computer network. So basically a blockchain connects and links device stakeholders to the same decentralized database in other to have a single source of truth thereby increasing data integrity. Blockchains are maintained using Peer 2 Peer computer networks

A stakeholder-device pair that takes part in executing a decentralized network's protocol software is referred to as a node. Their major job is to keep a public ledger consensus, which they achieve by validating transactions and keeping an eye on real-time activity to guarantee system security.

Blockchain ensures data integrity by utilizing a single source of truth to reduce data duplication and boost security.
An information technology (IT) architecture known as a peer-to-peer network enables two or more computer systems to communicate and share resources without the need for a separate server or servers.

What is Blockchain Technology
The mechanism behind the activities of a particular type of blochain is referred to as Blockchain technology. Blockchain technology is the main arm of the term "Blockchain" making it possible for nodes (stakeholder devices) perform very important and dynamic functions with the tap of some buttons.
The concept or mechanism that underpins the blockchain is referred to as Blockchain technology.

Why is Blockchain Important
Blockchain helps to do what a witness would do in the court of law, by creating a decentralized and unbreakable transaction record system to stop or lessen any unforeseen transaction error and issue. It also creates a single ledger for any transaction done.

More importantly, blockchain displaces the need for physical middlemen in a transaction making it easier for transactions to be done at a simpler and faster rate .

What are the features of Blockchain technology
The salient features of blockchain technology are as follows:

Immutability
One of the features of blockchain technology is immutability, the ability not to be changed.

No one can change the transaction once it is added to the shared ledger An error in a transaction record necessitates the addition of a new transaction to fix it; both transactions are then made available.

Concensus
This is a general agreement is made on the transaction by the network users in other to validate the transaction. New transactions can only be recorded after receiving the consent of most network users. Everybody on the network can view the distributed ledger and its unchangeable transaction history.

Decentralization
Decentralization in the context of blockchain technology refers to the transfer of control and decision making from a centralized entity (individual, organization or group) to a distributed network. The goal of decentralization in blockchain technology is to reduce autonomy by making sure authority and ownership is divided equally among stakeholders.

Which fundamental elements make up blockchain technology?
The following are the main elements of blockchain technology.

A distributed ledger
A distributed ledger is a digital record book or note which is used to store each and every transactions in a shared database with a blockchain network. It is shared among all the network users when the transactions are be finalized. An entry cannot be deleted once it has been recorded.
Smart Contract
Smart contracts are automatically generated by the blockchain network to ensure that transactions are completed with confidence.
Public key cryptography
Public key cryptography is a security element that allows users within a particular blockchain network to be uniquely identified. This security element generates two sets of keys for every network participant. Keys come in two varieties: public and private.

What are the types of Blockchain Networks

Currently, there exist four primary categories of blockchain networks.

Public Blockchain Network
A public blockchain network is a type of blockchain network that is open to anyone and works freely allowing anyone to join and perform transactions. Public blockchains are open to any user and are permissionless. The main uses of public blockchains are for mining and trading of cryptocurrencies such as Ethereum, and Bitcoin.
Private Blockchain Network
In a private blockchain network, users are given access through a firm or an entity thereby limiting the computing power to a percentage of persons or entity. Users takes permission or granted access before they can join this type of blockchain network. The authority determines who is eligible to join the network and what rights they have..
Hybrid Blockchain Network
The combination of private and public blockchain network makes up the Hybrid blockchain network. This type of blockchain is allowed to function both as a public and private blockchain depending on the goal of the organization or entity deploying it and the time.
Consortium Blockchain Network
A blockchain network that is governed or controlled by a group of organizations is called a consortium blockchain network. These organizations or bodies have equally shared controlling power.
Consortium blockchain networks are governed by a collection of organizations

How does Blockchain work
We provide a quick rundown of the steps that follow:
Step 1 – Record the transaction
Step 2 – Gain consensus
Step 3 – Link the blocks
Step 4 – Share the ledger

Uses of Blockchain Technology

Blockchain technology has continued to be impact other industries since the boom of cryptocurriences. Let's take a look at a few of them.

Product authentication: Customers and consumers can now identify a fake product and an original product proof of origin thanks to blockchain technology.
Cross-border payments: Because blockchain eradicates the need for middlemen and transaction costs,it has allowed clients and customers to deal more often.
Voting and governance: Blockchain technology is currently been integrated into their election processes making it extremely difficult for electoral malpractice and fraud.
Supply chain management: Through blockchain and its technology, some large retail companies have been able to track goods easily across the world and thereby reducing redundancy in the process.
Intellectual property management: Blockchain facilitates intellectual property rights registration by streamlining, improving accuracy, speeding up, and securing the procedure.

Benefits of Blockchain Technology
Several of them are enumerated in the subsequent subsections:

Improved efficiency
commercial interactions are made quicker and more effective by blockchain's transparency and smart contracts.
Advanced security
The great degree of confidentiality and trust that contemporary digital transactions demand is provided by blockchain technologies. The transaction records cannot be altered by a single user, and there is no single point of failure.
Faster auditing
Businesses need to have the ability to create, trade, store, and reassemble e-transactions in an auditable way while maintaining security. Due to the transparency of the data, audit processing is accelerated.
Censorship
Because blockchain technology is not centralized, it is unaffected by censorship. Thus, the network cannot be stopped by any one authority, not even governments.

Risks of Blockchain Technology

Among the principal Risks are:

Governance
Infrastructure
Data
Key Management

In conclusion, it doesn't matter if you are new to blockchain or not, blockchain and its technology is opening up a new sphere of possibilities for us to harness. I know in this article we have learnt a lot about Blockchain Technology.

Make sure you leave a comment below on what you think about blockchain technology.