What Is Blockchain Technology – Crypto Beginner’s Guide
The practical outcome, especially at the beginning is a path for an internet user for transferring a unique part of digital property to another user, in a manner that there is a guarantee on the transfer that it’s secure and safe. Everybody is aware that the transfer has already taken place and there is no one who can challenge the authentication of the transfer. The outcome of this breakthrough is indeed tough to overstate. These are the thoughts expressed by Marc Andreessen, the American investor, software engineer and an entrepreneur.
If you are not aware of what Blockchain technology is all about, this article will be of great use as it explains in depth of what it is all about. Read through the paragraphs below to understand the meaning and how it’s beneficial for users.
Blockchain technology in comparison with Wikipedia
A blockchain when you look at it from a cruising angle may not be so different from what you are already well versed with, like Wikipedia.
When it comes to blockchain, most individuals can jot down entries so as to maintain a record of the same. And then a group of individuals has a power on how the piece of information recorded is restructured and updated. Similarly, the entries on Wikipedia are not done by one publisher, but there are many others involved and have a control to make the required changes as and when required. There is no single person controlling the information.
Coming back to blockchain technology, the differences that make this term unique provides more clarity. Both Wikipedia and blockchain technology work on the distributed networks, Wikipedia is structured into the WWW (World Wide Web) through a client-server network model. The entries made on Wikipedia can be changed on a server that is centralized and a user who has the permissions related to its account can do so.
Each time the user tries to access the page of Wikipedia he gets the modified version of the actual copy of the Wikipedia entry. The administrators of Wikipedia have a control on the database and they provide the access and authorization to maintain the records.
The digital bone of Wikipedia is like the centralized records and databases which are secured by banks, governments and insurance companies today. The authority over centralized databases remains with the respective owners, which include managing the access, updates and protections against cyber-threats.
Key characteristic of blockchain technology
The database formed by blockchain technology consists of digital backbone which is fundamentally diverse. In fact, this is one of the most important and diverse characteristics of blockchain technology.
The master copy maintained in Wikipedia can be edited on the server and other users would be able to see the revised version. As far as blockchain is concerned, every joint of the network comes back to the same conclusion as each record individually and the popular record becomes the official one in addition to the presence of a master copy.
Each node creates its own modified version of actions while transactions are basically being broadcasted.
Basically, this is the main difference which makes the blockchain technology so vital. It displays an innovation in terms of registering and distributing information that reduces the requirement for a trusted party to make digital connections simpler. However, blockchain technology in spite of having these advantages is still not a latest technology. But, it’s a mix of technologies which are proven and applied in an innovative manner.
It was the specific automated management of 3 technologies which includes the internet, a protocol that governs incentivization and a personal key cryptography. It made Satoshi Nakamoto’s unique ideas so imperative. Satoshi Nakamoto is the creator of bitcoin.
Blockchains are designed using three technologies and the same has been listed below
- Private Key Cryptography.
- P2P Network.
- Program (Protocol of the blockchain).
The outcome is a system used for digital communications which needs no third party. The mechanism to secure digital relationships is embedded as it’s supplied by the strong network design of blockchain technology.
Definition of digital trust
Basically, trust is the assessment of risk between distinct parties and as far as the digital world goes, assessing trust often involves authentication which means proof of identity and verifying permissions or authorization.
In simple words, it is a technique to know who you actually are and if your identity is matched with who you say you actually are. Also, whether you are capable of doing what you have been attempting to do.
In the scenario of blockchain technology, the private key cryptographer provides a tool for strong ownership so as to complete the authentication needs. Possessing a private key means ownership. It helps an individual to protect his personal information while sharing only the minimum information required than exchanging information which may be accessed by hackers.
Only authentication does not suffice here. Authorization, adequate funds, broadcasting of the right type of transaction requires a distributed network to start off. A distributed network decreases the risk of failure of corruption. This distributed network should also commit to the security and record keeping of transaction network. Transactions when authorized are an outcome of the whole network, which applies regulations upon which it was structured (protocol of the blockchain).
When authorization and authentication is applied in this manner, it gives access to communications to the digital world without depending on trust which can be expensive. Nowadays, industrial entrepreneurs across the globe have woken up to the effects of this type of development wherein unique, strong and unimagined digital relationships come into existence. Blockchain technology is mostly regarded as the backbone when it comes to transaction cover from the internet. It is the basis of the Internet of Value.
The final conclusion
The concept that shared ledgers and cryptographic keys can benefit users to honor and secure digital relationships has thoughts running strong. Every department form IT firms, banks to governments is keen to form this particular layer of transaction. Authorization and authentication are undoubtedly crucial to digital transactions and they are being set up as an outcome of the blockchain technology’s configuration. The idea can be incorporated for those who require a reliable and authentic record system.