Things you need to know about Blockchain

1. What is Blockchain?

Blockchain is a database that is managed on a peer-to-peer network of computers, which are referred to as nodes. It can also be described as a distributed ledger: a decentralized way to chronologically document transactions. Each participant in the network has access to the entire blockchain and its history. When a transaction is recorded, the accounts of all the participants are updated with the information.

2. How Blockchain works?

If two parties agree to a transaction, this information is broadcast to the computers (nodes) of the peer-to-peer network, where it is then validated. Once the transaction has been verified, it is added to a block together with other transactions. This block is then hashed. Every block contains a reference to the hash of the block that came before it. This guarantees the position of the block in the chain and ensures that it cannot be tampered with. The new block is then permanently added to the blockchain and distributed to all its participants. The transaction is now complete.

3. There is not just one Blockchain

Blockchain can be implemented in many different ways; there is not just one single blockchain everybody uses. It is also not a product or a single software program. It can be compared to middleware in that blockchain itself has no real value – value is created only when it is used in conjunction with suitable applications.

4. Blockchain gets rid of Intermediaries

Blockchain creates the very trust it requires to function. It allows participants to transfer assets directly among themselves, thus bypassing third-party intermediaries like banks or brokers. It also makes it possible to quickly prove who has the ownership of a specific asset. Because each block is secured by cryptography, it is almost impossible to manipulate transactions recorded in a blockchain. This ensures the authenticity of every transaction and makes them virtually immune to forgery.

5. Blockchain goes beyond virtual currencies

Bitcoin and Blockchain are not the same things. Bitcoin is a virtual currency (or cryptocurrency), while blockchain is the tool that makes virtual currency viable. Bitcoin may be the best-known use case for blockchain, there are many others besides. For example, when a vote is cast and recorded in the blockchain, it is very hard to alter. That makes it difficult to commit voter fraud by manipulating votes. Furthermore, every voter would have a complete record at hand and could track the outcome as the vote takes place.

If you would like to know more about blockchain and its applications in business, you can contact us or directly send a mail to hello@codezeros.com. Let’s get together and create a secure world together.