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  • Sagar Acharjee

A-Z BLOCKCHAIN BREAKDOWN

Why You Should Be Familiar with Blockchain


Globally, according to the most recent world statistics, approximately 0.5 percent of the world's population is familiar with blockchain technology. To put this into perspective, the internet is used by approximately 50 percent of the world's population, or approximately 3.77 billion people. Despite these low numbers, the blockchain network is widely regarded as having the potential to significantly improve the quality of contemporary life. As a result, experts believe that blockchain will have even greater potential for global transformation than the internet did. This is a tremendous opportunity for you to gain a thorough understanding of this incredible technology, leapfrog the rest of the population, and maintain your lead. Blockchain has a number of intriguing characteristics, one of which is that, through its Distributed Ledger Technology (DLT), it creates a new type of market infrastructure that sits on top of and connects with all currently existing systems and procedures.



So it is applicable and usable in practically any field, including finance, food supply chains and technology, as well as the health and fashion industries, as well as politics and government. Thus, regardless of your industry, a fundamental understanding of blockchain technology is required if you want to remain relevant in the foreseeable future. But, above all, blockchain should be investigated for its potential as an investment vehicle. In addition, because blockchain is the technology that powers cryptocurrencies, understanding its concepts will enable you to make more informed investments and trades in cryptocurrency. This also provides the opportunity to invest in the most valuable coins and tokens, as well as in new businesses that are utilising blockchain technology. Don't forget Rule #1: Never invest in cryptocurrency unless you fully understand it, which includes understanding blockchain technology. Learn everything you can about cryptocurrency technology before you put your money at risk by investing in cryptocurrencies.


Everything You Need to Know About Blockchain


Consider the following scenario: you live in a small town called Cryptodora, where a variety of records are generated and maintained at the Town City Office. Land records and population records are examples of such records. Your regular tax payments to the town's coffers will be your responsibility as a citizen. It should go without saying that this will be used for the administration and development of the entire town. Normally, a ledger would be used to keep track of your financial transactions. The mayor of the town, as well as possibly the town's accountant, will be in charge of keeping track of this ledger and the other records. There are only one ledger and one or two custodians in place at this time, which makes it simple to manipulate the records. As you are all aware, what happened in the neighbouring town of Cryptohype was that the mayor and his accountant continued to steal money and make hidden alterations to the town's ledgers, resulting in the town losing money and eventually going bankrupt. The mayor even went so far as to alter property records in order to sell some of the town's lands to himself. You, on the other hand, have a fantastic idea: each citizen will have their own ledger, into which all records, tax payments, and expenses will be entered at the same time, allowing everyone to keep track of everything at once. It would be nearly impossible for the mayor and accountant to steal and hide their tracks if they had to go to everyone's house and change the records one by one, which would be nearly impossible.


This is the pinnacle of openness and honesty. A Distributed Ledger System (also known as a DLS) is the name given to the brilliant system you developed for your town. Blockchain, also known as Distributed Ledger Technology (DLT), is a system in which everyone has a ledger and retains records at the same time, and can observe any changes at the same time. It is a type of distributed ledger technology. This ledger file is not kept in the records of a single company, but rather on a central server. Instead, the ledger file is distributed throughout the world and saved on personal computers, which are all used to store data and perform mathematical calculations. Bitcoin (BTC) is a distributed ledger technology that makes it difficult or impossible to change, hack, or manipulate the data stored in it. To put it another way, blockchains are essentially digital ledgers of transactions that are duplicated and distributed across a distributed network of computers that make up the blockchain network. In the blockchain, each block contains a number of transactions, and every time a new transaction is completed on the network, each participant updates the ledger. This means that if a single block in a chain were to be changed, the change would be immediately noticeable. If hackers wanted to corrupt a blockchain system, they would have to change every block in the chain across all distributed versions of the chain.


What is the procedure?


Take, for example, the most well-known application of blockchain technology, Bitcoin, to demonstrate how it operates. As we've discussed, bitcoin is a digital currency, just like any other national currency, and it's important to understand how it works.


Bitcoin was created using the blockchain distributed ledger system, which is a file that keeps track of all transactions as well as the number of bitcoins that each user currently has in his or her possession. Let us follow the example set by our town. As a result, your technologically advanced town of Cryptodora has devised a system to ensure that town records cannot be altered. Some young high school students decide to continue their education. Why don't you take advantage of this system to set up a payment system that everyone can see and track? Bitcoin is the name of this digital currency. To pay the Waste Management Contractor 5 bitcoins, the mayor must first send a message to all nodes (in this case, all citizens) specifying that the town's bitcoin balance should be decreased by 5 and the Waste Management Contractor's balance should be increased by 5. Each computer (citizen) will now receive this information and will be able to update its copy of the town's and contractor's bitcoin balances accordingly.


This system eliminates the need for a central record keeper, which is a significant benefit (i.e., banks). Blockchain enables everyone to see each other's transactions and eliminates the need to rely on the word of a single individual or organisation. No one will be able to change property records or defraud anyone if the town estate records are built on a blockchain system, for example, because no one can sell the same property twice. This system can be applied to a wide range of business and social situations, which is why experts consider it to be so revolutionary in nature. Certain mathematical functions and codes are employed in order to ensure security and dependability. In the case of Bitcoin, each wallet is protected by a cryptographic mechanism that employs a unique and distinct pair of linked keys: a public key and a private key, which are linked to the blockchain. Each of these characteristics of blockchain technology translates into a specific benefit when it is put to use. Bitcoin, as well as all other cryptocurrencies, are built upon the blockchain technology.



The Advantages of Blockchain Technology


To begin, let us consider the advantages of blockchain technology.


First. Transparency: Because of blockchain, transaction histories are now more transparent than they have ever been. Because it is a distributed ledger, all nodes in the network have access to the same copy of the documentation. The information contained in a blockchain ledger is accessible to the general public and can be viewed by anyone. If the history of a transaction changes, everyone in the network will be able to notice the change and the updated record. Consequently, everyone now has access to all currency exchange information on the internet.


Second, blockchain outperforms virtually every other record-keeping system in terms of security, according to all available evidence. The shared transaction documentation of a blockchain network can only be updated and/or amended with the agreement of all participants. The information is only updated if everyone or a majority of the nodes agree that it should be done that way. Additionally, once a transaction is approved, it is encrypted and linked to the transaction that came before it. As a result, no single individual or political party has the authority to alter a record. Blockchain is decentralised, which means that no one has the authority to make changes to records at their leisure. Blockchain technology can be used to impose strict security in any area where sensitive data is required to be protected, such as government, healthcare, financial services, and so on.


Third, efficiency is important because traditional paperwork methods are time-consuming and prone to human error because they necessitate the involvement of a third-party. This can be accomplished through the use of blockchain technology, which eliminates the possibility of human error and makes trading more efficient and faster than it was previously. Because there is only one ledger, there is no need for parties to keep a variety of records, resulting in a significant reduction in clutter. When everyone has access to the same information, it is also easier to foster trust among them. Settlements can also be made as smooth and painless as possible without the involvement of third parties.


Fourth. Traceability: In complex supply chains, it can be difficult to trace items back to their original point of origin. Unlike traditional accounting methods, blockchain keeps track of every transaction, allowing you to track down where a specific asset came from with pinpoint accuracy. This level of product tracking can assist in verifying authenticity and preventing fraud by providing information on every stop the goods made along the way.


Fifth. Cost Savings: Because blockchain eliminates the need for third parties and intermediaries, it allows organisations to save a significant amount of money on their operations. If you can put your trust in your trade partner, you won't need anyone else to set the rules and policies of the exchange. Everyone has access to a single, immutable version of the ledger, which reduces the amount of time and money spent on documentation and changes in the future.