What is blockchain and its value?

Published:Dec 21, 2023

Blockchain is a public ledger or distributed database that contains all Bitcoin transactions. This is an open-source technology, information is immutable, and anyone can access these details at any time. Due to blockchain being a distributed ledger, there is no control or central authority over the stored records. Anyone on the internet can add this data and it cannot be further deleted or changed. Usually, blockchain stores data in the form of blocks, which are linked together like a chain and will be encrypted for security reasons. To verify the transaction, blockchain used a proof of work mechanism.

What kind of data can blockchain store?

Blockchain is a distributed database that maintains detailed information about each transaction in a series of blocks, which will be added to the ledger in chronological order. The detailed transaction information stored is in a block called the origin block.

What are the types of blockchain?

Public Blockchain - It is a decentralized open source platform where anyone with internet connectivity can become part of the blockchain network, access current and past records, and verify transactions. The purpose of public blockchain is to mine and exchange cryptocurrencies

For example: Bitcoin, Ethereum

Private blockchain - It is a centralized platform with some restrictions and permissions to join the network. These blockchains are typically used in enterprises and organizations. The purpose of private blockchain is voting, supply chain management, digital identity, asset ownership, etc

For example: Hyper ledger, Corda

Hybrid blockchain - It is a combination of public and private blockchains. This hybrid blockchain allows businesses to flexibly choose the data they want to publicly disclose and which data needs to be kept private

What are the main characteristics of blockchain?

Decentralized - without central authorities to monitor, instead, all your activities will be stored in a public distributed ledger for enhanced security - all information on the blockchain is encrypted hashed, meaning the network will hide input data through mathematical puzzles

Distributed ledger - Every information about transactions and participants is distributed to every node in the blockchain network

Consensus Algorithm - This consensus algorithm is responsible for verifying transactions, balances, and signatures

What is the difference between blockchain and traditional databases?

The main difference between blockchain and traditional databases is the architecture - blockchain uses distributed ledger technology, while databases use a client server architecture

Integrity - Blockchain supports data integrity, and malicious activities may occur in the database

Transparency - Blockchain provides high transparency, while there is control in database management