First, Blockchain was introduced by (Satoshi) Nakamoto around 2008. For years, the design system continued to be improved. It grew to become a primary functionality of Bitcoin, a well-known cryptocurrency. Cryptocurrencies such as Bitcoin have grown rapidly since they were introduced.
With this fast growth, the financial technology system rose to become the beginning of the application of blockchain technology. Blockchain has been in the custody of many cryptocurrencies today. It has widely helped a lot of people holding cryptocurrencies for years. It is important to take note of how it works and the cryptocurrencies it works with.
Population estimates
Over 82 million people use bitcoins and other cryptocurrencies, according to estimates. That makes it the most widely used application of blockchain technology. And these accomplishments are active in such a way that many companies are emulating them.
In blockchain technology, transactions are recorded in a digital record system, and this information is distributed over a secure network. Land and assets can be transferred onto the blockchain as a transaction.
Transaction Knowledge
Every transaction made on this channel is protected through a digital signature. This process eliminates the use of third parties to process online transactions.
Blockchain technology does not rely on a central system. Rather, the data is spread over a global network of computers that have access to the blockchain.
There are many types of blockchain engineering systems in existence. Examples are private blockchains. They are structured to meet the needs of a specific group of people, and access to this network is controlled.
Additionally, the blockchain system provides a permanent record of transactions that cannot be altered, thereby providing transparency of transactions for the benefit of everyone involved.
Blockchain systems offer the possibility to change archaic modes of business operations. This system also opens opportunities for wealth creation.
How the Blockchain System Operates
It is no news that companies around the globe are now utilising blockchain for their operations. However, we need to understand how the blockchain system works. Blockchain combines three leading technologies.
- Cryptographic keys
- Peer-to-peer network
- A means of computing storage for transactions and records of the system’s network
A cryptographic key consists of two keys, i.e. a private key and a public key. They facilitate smooth transactions between two parties.
Keys are kept by each party and used to reference a secure digital identity. This identity is also known as a digital signature and is usually used in transaction authorisation.
The digital signature identity is joined with the peer-to-peer network, and parties who serve as asauthoritiesy use the signature to conclude transactions.
As soon as a deal is approved by the authorities, it goes through a mathematical process of verification, resulting in a secured transaction between both parties.
Types of Blockchain Networks
There are other areas we can still look at as subtypes of blockchain, but currently, there are four types of blockchains as listed below.
- Private Blockchain Networks: These are operated on closed system networks and are useful for private companies and organisations. Among other matters of security, they use private blockchains to design preferences on accessibility and authorisation of transactions.
- Public Blockchain Networks: These networks can eliminate issues like security breaches and centralisation. Most major cryptocurrencies use public blockchains and play roles in making Distributed Ledger Technology well-known. With this Ledger, data is distributed among a peer-to-peer network. An algorithm is used to verify the authenticity of the information.
- Hybrid Blockchain Networks: Businesses use this category of blockchain to enable a useful structure when delegating who can use the network and for specific transactions. This network gives access to specially authorised individuals only.
- Consortium Blockchain: Consortium blockchains are similar to hybrid blockchains. This type of blockchain can be complex to set up and use, but it comes with more security and is best for teaming up with multiple companies.
Application of Blockchain
Currently, there are more than 15000 cryptocurrency systems using blockchain technology. Blockchain has become a trusted way of storing transaction data. Several modern companies have integrated blockchain into their financial operations.
For product companies, blockchain enables these companies to track the movement and coverage of their products. Companies can track who comes in contact with their products.
Banking and Finance
The banking and finance industry enjoys a lot of benefits from applying blockchain to its business operations. Not only this, but many businesses seize this opportunity to partner with blockchain and make a profit with it.
The ideal scenario is for banks and financial institutions to operate in full during business hours. Sometimes, the transactions take hours and days to complete successfully.
This is due to the huge volume of transactions being carried out at the time. The blockchain, however, can speed up these processes by allowing transactions to take place at any time of day.
As a result of the incorporation of blockchain into banking processes, transactions are completed in minutes and can be processed at any time. Funds are also transferred securely. This results in lower risks for customers and the bank.
Healthcare Sector
The healthcare sector is not left out in the application of blockchain. Healthcare personnel can use blockchain to store patients’ medical records securely. It will be safe forever.
Blockchain security allows patients to trust the confidentiality and accuracy of their records. Information can be stored using a private key, and accessibility to this key is restricted to certain verified individuals.
Smart Contracts
A computer code that can be merged into a blockchain to verify a contract is referred to as a smart contract. The contractor and client operate using terms and conditions agreeable to both parties. We can achieve this when we use blockchain technology.
Elections/ Voting
With the development of blockchain, voting systems can now be implemented. Using blockchain technology in the voting process has proven to reduce election fraud.
The blockchain system prevents voters from being tampered with and ensures transparency in the voting process. Using blockchain, results are provided faster than when it is done manually.
Benefits or advantages of Blockchain
Blockchain has a lot of benefits to rely on. Some of the trusted benefits are discussed below.
- Trustworthiness: Blockchain transactions promote trust. Companies have come to rely on blockchain transactions for major transactions. Since there is no central server, all transactions are secure. Additionally, blockchain doesn’t allow for unauthorised access due to its structure.
- Time and Cost Savings: A blockchain system reduces transaction costs by eliminating the need for third parties. Settlements and transactions are processed more quickly. Participants in a transaction have access to a shared ledger.
- Security: The blockchain engineering system is designed to protect users against fraudulent transactions and cybercrime.
Disadvantages of Blockchain
Blockchain and cryptography use public and private keys in their operations. In a situation where a user forfeits their private keys, retrieving them is difficult, posing a challenge.
Also, altering a transaction or changing information after it has been recorded is difficult. This poses another major disadvantage of blockchain.
Technology Cost
Blockchain technology is not free, although it helps to save users’ and businesses’ costs on transactions. The system which the network uses to verify transactions uses a large amount of computational power.
Conclusion
There are many applications of blockchain technology being explored and integrated. By using blockchain, businesses can be more secure and faster. Companies must hop on this technology to improve their operations because the future is proving to witness more growth for blockchain technology. Read the similar article on this page.
Ibukun Akanbi
adminate
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