All About Blockchain – The Importance of Blockchain
The first thing that anyone’s mind asks first after hearing the expression ‘Blockchain’ is “What is it??” So, before coming to that part, we need to know about what ‘Cryptocurrency’ is. Cryptocurrency is an internet-based digital medium of exchange using strong cryptography for conducting digital exchanges. Nowadays, it has become a rapidly growing technology using by both industries and academic areas. One of the most well-known cryptocurrency is Bitcoin. In 2016, the Bitcoin market has reached up to 10 billion dollars. Since it has been released, over 4000 of other alternative variants have been created. Now, let’s talk about Blockchain. It is a decentralized distributed database that is used to save the records of the growing lists called ‘Blocks’. These so-called ‘Blocks’ are contained with timestamp and the previous blocks cryptographic hash each. By design and purpose, Blockchains are inherently resistant to data modification. It allows us to send and receive money prohibiting any kind of third party applications. It actually serves as an open distributed ledger that can record the transactions between the performing parties efficiently. The first describers of a Blockchain work were Stuart Haber and W. Scott Stornetta in 1991. Later, in 1992, they implemented the Merkle Trees to improve its efficiency which allows several document certificates in one block. The structure of a blockchain is described as a linked record of transaction blocks. Each block mentions a former block, also identified as the parent block, in the “previous block hash” field, in the block header. Here are the terms used to define the structure of a Blockchain, Firstly, the Index, which indicates the location of a block inside the chain. It starts with ‘0’ and goes on. Secondly, the Hash, which facilitates the classification of data in the set. Thirdly, the Previous Hash. As it is previously told that every block in a chain is associated with the previous one, this character is defined to add to its immutability as a variety in the block order. The ‘numTx’, which tallies the number of transactions performed in a block. The Timestamp, which saves the time aspects of the building time of the block. Nonce, which saves the integer used in mining. It may be 32 bit or 64 bit. The Transaction, which saves the specific version of transactions as arrays performed so far in the block. Finally, the Merkle Tree, which has been designed to improve the efficiency of the chain. Here is the structure diagram:- As it is a rapidly growing technology nowdays, it is ovious to have its various kinds of applications and usages. Here are some them below:- Cryptocurrency – Most of the cryptocurrencies uses this technology to save records. Like Bitcoin and Etherium both uses Blockchain. Loans – According to Microsoft, the blockchain technology can also be used for all kind of loans. Smart Contracts – Blockchain-based smart contracts can be partially or fully executed proposed contracts, which may be enforced also. Obligations – As an obligation can be viewed as a special type of loan, it would go very well with the Blockchain also. Voting System – The smart contracts of Blockchain can be also used for the voting system. Financial Services – According to a study by IBM, this technology is rapidly growing on banking services. Video Games – In November 2017, a game named CRYPTOKITTES, was developed by Blockchain. Energy Reserve Supply Market – Creating a supply and demand market for energy where smaller parties can join just as easily as big ones. Hopefully to ease the strain on the already existing network on peak moments for the demand of energy. As per the rule of science, Blockchain technology also has its advantages and drawbacks. The advantages are:- 1. Since Blockchain is an open-source ledger, each and every transaction will be made public and hence there will be no chance of fraud taking place. 2. The government or any financial institution has absolutely zero control over virtual currencies that are based on Blockchain technology. 3. The virtual currencies/digital currencies that are based on Blockchain offer transaction times that are more instant than the usual bank ones. 4. The Blockchain technology lets individuals and companies make transactions directly to the end-user without involving any 3rd-parties. Following these advantages, the drawbacks are:- 1. The virtual currencies that are based on Blockchain technology are extremely volatile. 2. Because of the anonymity that exists in decentralized blockchain and virtual currencies which rely on them, they have become a second home for online criminals. 3. Storing virtual currencies that are Blockchain-based are a big headache for people who are not so tech savvy. The application of Blockchain technology is not limited only to the finance industry. It has a fantastic future in different sectors such as supply chain management, digital advertising, forecasting, cybersecurity, Internet of things, networking, etc. Blockchain technology also has a huge prospective to provide new openings for occupation in the industry. So knowledge of Blockchain among professionals is required these days and many institutions have started providing Blockchain certification training as well. It also enhances the professional’s capability to upgrade themselves. With the help of Blockchain technology, it is possible to transform the whole world into a much smaller place. The transactional activities can be performed much faster and efficiently using Blockchain. Blockchain technology is going to be used in many more sectors in the future such as in government systems as these systems are slow, dense, and likely to corruption. Implementing Blockchain technology in government systems can make their operations much more secure and efficient.