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Understanding Blockchain Technology

Blockchain technology provides a way to build trust in digital transactions by implementing a distributed ledger or decentralized database that records transactions in a linear chain of cryptographically secured blocks. Each new block of transactions is linked and added to the previous blocks, allowing the entire transaction history to be continually updated across all copies of the ledger within the network. This ensures authentication and prevents modification of past transactions. Blockchain has applications beyond digital currencies like Bitcoin, including executing peer-to-peer contracts through public blockchains like Ethereum and managing records in industries that rely on trusted intermediaries.

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Mary Peace
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45 views2 pages

Understanding Blockchain Technology

Blockchain technology provides a way to build trust in digital transactions by implementing a distributed ledger or decentralized database that records transactions in a linear chain of cryptographically secured blocks. Each new block of transactions is linked and added to the previous blocks, allowing the entire transaction history to be continually updated across all copies of the ledger within the network. This ensures authentication and prevents modification of past transactions. Blockchain has applications beyond digital currencies like Bitcoin, including executing peer-to-peer contracts through public blockchains like Ethereum and managing records in industries that rely on trusted intermediaries.

Uploaded by

Mary Peace
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Blockchain Technology

Introduction

Digital transactions involving money, stocks & intellectual


property, are essentially files and they are incredibly easy to
reproduce.

Hence there is a need to ensure trusts in digital transactions and


there is a need to provide for authentication & record keeping.

Blockchain technology is one of the technologies available to


provide for the building of trusts in digital transactions.

Blockchain basically implements the concept of a digital notary


where we can prove that a digital transaction existed at one
point in time.

How does Blockchain works?

Blockchain is a type of distributed ledger or decentralized


database that keeps records of digital transactions.

The distributed ledger has a network of replicated databases,


synchronized and visible to anyone within the network.

When a digital transaction is carried out, it is grouped together


in a cryptographically protected block with other transactions
that have occurred and sent out to the entire network.

The validated block of transactions is then timestamped and


added to a chain in a linear, chronological order. New blocks of
validated transactions are linked to older blocks, making a chain
of blocks that show every transaction made in the history of that
blockchain. The entire chain is continually updated so that
every ledger in the network is the same.

Bitcoin and Blockchain


Bitcoin is a digital currency and is one of the many applications
which uses the blockchain technology.

Public Blockchain

Blockchain networks can be private with restricted membership


similar to an intranet, or public, like the Internet, accessible to
any person in the world.

One example of the evolution and broad application of


blockchain, beyond digital currency, is the development of the
Ethereum public blockchain, which is providing a way to
execute peer to peer contracts.

Advantages of Blockchain

Blockchain allows people to trust each other and transact peer to


peer without the need for intermediaries.

For the blockchain to be compromised, a hacker would need to


hack not only one block but the entire history of blocks in the
blockchain and they would need to do it on every ledger in the
network.

Blockchain has applications that go way beyond obvious things


like digital currencies and money transfers and include
applications like patient health records management and proof
of ownership for digital content, etc.

Blockchain will have profound impact on industries that rely on


intermediaries as the elimination of intermediaries brings mostly
positive benefits.

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