What is it and how does it work?


New Delhi: A blockchain is a distributed distributed database or ledger between the nodes of a computer network. Blockchain acts as an electronic database for storing data in digital form. The most well-known use of blockchain technology is to store secure and decentralized information in cryptocurrency systems such as Bitcoin. The innovation of blockchain is that it increases trust without the need for a trusted third party by ensuring data accuracy and security.

The way data is organized on a blockchain is significantly different from how it is typically organized. In blockchain, data is collected in groups called blocks, each of which contains sets of data. Blocks have special storage properties, and when filled, they are closed and connected to the block before them to create a data chain known as a blockchain. Any additional data that comes after this new block is combined into a completely new block that is added to the chain when it is full.

A blockchain, as its name suggests, organizes its data into chunks (blocks) that are linked together, while a database typically organizes data into tables. When this data structure is used in a distributed manner, it creates an irreversible chronology of data. Once a block is complete, it is irrevocably sealed and added to the timeline. When a block is added to the chain, it receives an accurate timestamp.

How does it work?

Blockchain aims to enable the sharing and storage of digital information without modifying it. Blockchain serves as the basis for immutable ledgers or transactions that cannot be changed, deleted or destroyed. Blockchains are therefore also called distributed ledger technologies (DLT).

The blockchain idea was first introduced as a research project in 1991, long before Bitcoin became a widely used application in 2009. Since then, numerous cryptocurrencies, decentralized finance applications (DeFi), non-fixable tokens (NFTs), and smart contracts have led to an explosion of blockchain usage. to growth.

How is it used?

As we now understand, the blocks of the Bitcoin blockchain store information about monetary transactions. More than 10,000 other cryptocurrency systems are currently active on the blockchain. However, it turns out that using the blockchain to store information about other types of transactions is also a secure method.

Walmart, Pfizer, AIG, Siemens, Unilever and many other companies are just a few that have already adopted blockchain technology. For example, IBM developed the Food Trust blockchain to track the routes of food items to their destination.

A blockchain is simply a distributed database or ledger. Each node in the network has an exact copy of the entire database, and the information is stored in data structures called blocks. Since most ledger copies do not reflect this change, an attempt is made to modify or delete the entry in one copy of the ledger to ensure safety.

Every day, the number of active blockchains grows exponentially. By 2022, there will be several hundred other non-cryptocurrency blockchains in addition to the 10,000+ active cryptocurrencies built on the blockchain.

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